SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

                              __________

                               FORM 10-K

  X  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the fiscal year ended      December 31, 2002
                               --------------------------

                                    OR

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

     For the transition period from                 to
                                    ---------------    ---------------

          Commission file number    0-5485
                                 ------------

                       VISKASE COMPANIES, INC.
                       -----------------------
        (Exact name of registrant as specified in its charter)

     Delaware                                                      95-2677354
-------------------------------                           -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification No.)

625 Willowbrook Centre Parkway, Willowbrook, IL                         60527
-----------------------------------------------                         -----
(Address of principal executive offices)                           (Zip Code)

     Registrant's telephone number, including area code:  (630) 789-4900

         Securities registered pursuant to Section 12(b) of the Act:

                                    None

         Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, $.01 par value

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes   X       No
                                                   -----        -----

     Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b2 of the Act). Yes       No   X
                                          -----    -----
     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
K or any amendment to this Form 10-K. Yes       No   X
                                          -----    -----

     As of March 21, 2003 the aggregate market value of the voting stock held
by non-affiliates of the registrant was $53,682.

     APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has
filed all documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the distribution
of securities under a plan confirmed by a court. Yes  X     No
                                                     -----     -----

     As of March 31, 2003, there were 15,314,562 shares outstanding of the
registrant's Common Stock, $.01 par value.




                            Page 1 of 139 Pages
       An Index to Exhibits required by Item 15 is found at page 35.

<PAGE>
                         VISKASE COMPANIES, INC.

                      Form 10-K Annual Report - 2002

                            Table of Contents

PART I                                                                   Page
  Item 1.   Business                                                       3
  Item 2.   Properties                                                    10
  Item 3.   Legal Proceedings                                             10
  Item 4.   Submission of Matters to a Vote of Security Holders           12

PART II
  Item 5.   Market for Registrant's Common Equity and Related
              Stockholders Matters                                        13
  Item 6.   Selected Financial Data                                       14
  Item 7.   Management's Discussion and Analysis of
              Financial Condition, Results of Operations                  15
  Item 7a.  Quantitative and Qualitative Disclosures
              about Market Risk                                           23
  Item 8.   Financial Statements and Supplementary Data                   24
  Item 9.   Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure                         24

PART III
  Item 10.  Directors and Executive Officers of the Registrant            25
  Item 11.  Executive Compensation                                        26
  Item 12.  Security Ownership of Certain Beneficial Owners
              and Management                                              32
  Item 13.  Certain Relationships and Related Transactions                33
  Item 14.  Controls and Procedures                                       33

PART IV
  Item 15.  Exhibits, Financial Statement Schedules and
              Reports on Form 8-K                                         35

<PAGE>
                                  PART I

ITEM 1.   BUSINESS

(a)       General development of business: (in thousands, except number of
          shares and per share and per bond amounts)

General

Viskase Companies, Inc. (formerly Envirodyne Industries, Inc.) is a Delaware
corporation organized in 1970. As used herein, the "Company" means Viskase
Companies, Inc. and its subsidiaries. The Company, through Viskase
Corporation (Viskase), operates in the casing product segment of the food
industry. Viskase is a major producer of cellulosic and plastic casings used
in preparing and packaging processed meat products. The market positions of
the Company's subsidiaries set forth in this Form 10-K represent management's
belief based upon internally generated information. No independent marketing
information has been used to confirm the stated market positions.

In recent years, the Company has sold certain of its operations in order to
reduce indebtedness and increase its operational focus. As a result of these
efforts, the Company sold its wholly owned subsidiary Sandusky Plastics, Inc.
(Sandusky) in June 1998, its wholly owned subsidiary Clear Shield National,
Inc. (Clear Shield) in July 1998 and its plastic barrier and non-barrier
shrink film business (Films Business) in August 2000. These divestitures have
left the cellulosic and plastics casings business as the Company's primary
operating activity. In addition, since 1998 the Company has implemented a
number of restructuring measures to reduce the fixed cost structure of its
remaining business and to address competitive price pressures and increases
in various production costs in the Company's business.

For more information about us, our products, services and solutions, visit
www.viskase.com. Also, our annual reports on Form 10-K, quarterly reports on
Form 10-Q and current reports on Form 8-K will be made available free of
charge through the Investor Relations section of our website as soon as
practicable after such material is electronically filed with, or furnished
to, the Securities and Exchange Commission.

Bankruptcy and Plan of Reorganization

On November 13, 2002, Viskase Companies, Inc. (VCI) filed a prepackaged
Chapter 11 bankruptcy in the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division (Bankruptcy Court). The Chapter 11
filing is for VCI only and does not include any of the Company's domestic or
foreign subsidiaries. On December 20, 2002 the Bankruptcy Court confirmed
VCI's Prepackaged Plan of Reorganization as Modified (The Plan, as modified).
VCI expects to consummate The Plan, as modified, and emerge from Chapter 11
bankruptcy in early April, 2003 (Effective Date).

Cash flows from operations for the Company were insufficient to pay the
10.25% Senior Notes (Senior Notes) when they matured on December 1, 2001, and
accordingly the Company did not pay the $163,060 principal and $8,357
interest that became due at that time. In September 2001, certain of the
holders of the Senior Notes formed an ad hoc committee (Ad Hoc Committee) to
participate in the development of a plan to restructure the Company's capital
structure and address its future cash flow needs. On July 15, 2002, the
Company executed a restructuring agreement with the Ad Hoc Committee for the
restructuring of the Senior Notes. Under terms of the restructuring
agreement, on or about August 21, 2002 the Company initiated an exchange
offer to exchange the Senior Notes for new 8% Senior Subordinated Secured
Notes due 2008 (New Notes) and shares of Series A Preferred Stock (Preferred
Stock). The proposed exchange offer was subject to acceptance by holders of
100% of the outstanding Senior Notes, unless waived by the Company and
approved by the Ad Hoc Committee. The exchange offer was conducted
simultaneously with a solicitation for a prepackaged plan of reorganization
(Plan) for the Company which required the consent of a majority in number of
the holders and at least 66-2/3% in principal amount of Senior Notes actually
voting in the solicitation. Under the restructuring agreement, if less than
100% of the outstanding Senior Notes accepted the exchange offer, but a
sufficient number of
<PAGE>
holders and aggregate amount of Senior Notes voted in favor of acceptance of
the Plan, the Company agreed to commence a voluntary Chapter 11 petition to
seek confirmation of the Plan. The Plan contains substantially the same
economic terms as the exchange offer.

Although 100% of the outstanding Senior Notes did not accept the exchange
offer, the Company did receive votes to accept the Plan from approximately
91.4% of the holders and 91.4% in the outstanding principal amount that
actually voted. Accordingly, on November 13, 2002, VCI filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court
to seek confirmation of the Plan. Under Chapter 11, the Company may operate
its business in the ordinary course, subject to prior Bankruptcy Court
approval of transactions outside the ordinary course and certain other
matters.

The Chapter 11 filing was for VCI only. The Chapter 11 filing does not
include any of the Company's domestic or foreign operating subsidiaries.
Therefore, the Company's operating subsidiaries continued to provide an
uninterrupted supply of products and services to customers worldwide. Trade
creditors and vendors have been totally unaffected and continue to be paid in
the ordinary course of business, and the operating subsidiaries' employees
have been paid all wages, salaries and benefits on a timely basis.

Under the terms of the Plan, the Company's wholly owned operating subsidiary,
Viskase, will be merged with and into VCI immediately prior to or upon
consummation of the Plan with VCI being the surviving corporation. The
outstanding Senior Notes will receive New Notes and shares of new common
stock (New Common Stock) to be issued by the Company on a basis of $367.96271
principal amount of New Notes (i.e., $60,000) and 63.4122 shares of New
Common Stock (i.e., 10,340,000 shares or 94% of the New Common Stock) for
each one thousand dollar principal amount of Senior Notes. The existing
shares of common stock of the Company will be canceled. Holders of the old
common stock (Old Shares) will receive warrants with a term of seven years
to purchase shares of New Common Stock equal to 2.7% of the Company's New
Common Stock at an exercise price of $10.00 per share (Warrant). Assuming all
Warrants are exercised, holders of the Senior Notes would receive
approximately 91.5% of the New Common Stock and approximately 5.8% would be
issued or reserved for issuance to the Company's management and employees.

Under the proposed restructuring, 660,000 shares of New Common Stock (or upon
the request of Company management, options to purchase 660,000 shares of New
Common Stock), initially representing 6% of the New Common Stock, will be
reserved for Company management and employees. Such shares or options will be
subject to a vesting schedule with acceleration upon the occurrence of
certain events.

The New Notes would bear interest at a rate of 8% per year, and will accrue
interest from December 1, 2001, payable semi-annually (except annually with
respect to year four and quarterly with respect to year five), with interest
payable in the form of New Notes (pay-in-kind) for the first three years.
Interest for years four and five will be payable in cash to the extent of
available cash flow, as defined, and the balance in the form of New Notes
(pay-in-kind). Thereafter, interest will be payable in cash. The New Notes
would mature on December 1, 2008 with an accreted value of approximately
$89,453, assuming interest in the first 5 years is paid in the form of New
Notes (paid-in-kind).

The New Notes would be secured by a first lien on the assets of the Company,
other than the assets subject to the General Electric Capital Corporation
(GECC) lease and certain real estate, post-merger. The New Notes would be
subject to subordination of up to $25,000 principal amount for a secured
working capital credit facility for the Company.

Upon completion of the proposed restructuring the Board of Directors of the
Company would be reconstituted to consist of five members, including the
Company's Chief Executive Officer and four other persons designated by the Ad
Hoc Committee.

The Ad Hoc Committee has retained legal counsel. The fees and expenses were
paid by the Company until the commencement of the Bankruptcy.

<PAGE>
In addition, the members of the Ad Hoc Committee have agreed not to transfer
(other than to another member of the Ad Hoc Committee or an affiliate of a
member) their shares of New Common Stock for a period of two years after the
restructuring is completed. For a period of one year thereafter, the Company
would have a right of first refusal to either purchase or designate a
purchaser for shares of New Common Stock to be transferred by a member of the
Ad Hoc Committee to a person other than another member of the Ad Hoc
Committee or their affiliates.

Under Chapter 11, certain claims against VCI (the Debtor) in existence prior
to the Petition Date (November 13, 2002) were stayed while the Company
continued business operations as a debtor-in-possession. These claims are
reflected in the December 31, 2002 balance sheet as "Current liabilities
subject to compromise." As of the Petition Date, the Company stopped accruing
interest on the 10.25% Senior Notes. The interest not accrued from the
Petition Date through December 31, 2002 is $2,294.

The principal categories of claims reclassified in the Consolidated Balance
Sheets and included in Current liabilities subject to compromise are
identified below. These amounts may be subject to future adjustments
depending on Bankruptcy Court actions, further developments with respect to
disputed claims, the existence and value of any collateral securing such
claims and other events. At the Petition Date the amounts reflected below are
for the Senior Notes and accrued interest through the Petition Date.

Current liabilities subject to compromise as of the Petition Date are as
follows (refer to Note 1 to the consolidated financial statements):

          (in thousands)

     10.25% Senior Notes         $163,060
     Accrued interest              25,098
     Other current liabilities         40
                                 --------
                                 $188,198
                                 ========

The accompanying consolidated financial statements have been prepared in
accordance with the American Institute of Certified Public Accounts Statement
of Position 90-7: Financial Reporting by Entities in Reorganization under the
Bankruptcy Code and have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which contemplates
continuity of operations and assumes the realization of assets and
liquidation of liabilities in the ordinary course of business.

Following the approval of a plan of reorganization, SOP 90-7 requires that
the Company adopt "Fresh Start" accounting resulting in recording all assets
and liabilities at fair value. Upon emergence from bankruptcy, the amounts
and classifications reported in the consolidated historical financial
statements could materially change.

GECC, Viskase's equipment lessor, has agreed, subject to certain conditions,
not to accelerate payment of amounts due because of any default or event of
default under any of the lease documents arising from (i) the Company's
failure to meet the Fixed Charge Coverage Ratio for the fiscal quarters
ending on March 31, 2002, June 30, 2002, September 30, 2002 and December 31,
2002 and (ii) the Company becoming a debtor under Chapter 11 of the
Bankruptcy Code until April 21, 2003. There is no agreement with GECC to
extend the forbearance beyond April 21, 2003. However, the Company and GECC
have agreed to amend certain lease documents upon the emergence from
bankruptcy. The amendment will permanently waive prior non-compliance with
the Fixed Charge Coverage Ratio and establish a new Fixed Charge Coverage
Ratio for the remainder of the lease term. The amendment also changes the
February 28, 2004 lease payment with $11,750 due on February 28, 2004 and
$11,749 due on August 28, 2004.

(b)       Financial information about industry segments:

Reference is made to Part IV, Item 15, Note 24 of Notes to Consolidated
Financial Statements.

<PAGE>
(c)       Description of business

General

Viskase invented the basic process for producing casings from regenerated
cellulose for commercial production in 1925. Management believes that Viskase
has been a leading worldwide producer of cellulosic casings since that time.

Cellulosic Casings

Cellulosic casings are used in the production of processed meat and poultry
products, such as hot dogs, salami and bologna. To manufacture these
products, meat is stuffed into a casing, which is then cooked and smoked. The
casings, which are non-edible, serve to hold the shape of the product during
these processes. For certain products, such as hot dogs, the casings are
removed and discarded prior to retail sale. Casings made of regenerated
cellulose were developed by Viskase to replace casings made of animal
intestines. Cellulosic casings generally afford greater uniformity, lower
cost and greater reliability of supply and also provide producers with the
ability to cook and smoke products in the casing. Cellulosic casings are
required for the high-speed production of many processed meats.

The production of regenerated cellulose casings generally involves four
principal steps: (i) production of a viscose slurry from wood pulp, (ii)
regeneration of cellulosic fibers, (iii) extrusion of a continuous tube
during the regeneration process, and (iv) "shirring" of the final product.
Shirring is a finishing process that involves pleating and compressing the
casing in tubular form for subsequent use in high-speed stuffing machines.
The production of regenerated cellulose casings involves a complex and
continuous series of chemical and manufacturing processes, and Viskase
believes that its facilities and expertise in the manufacture of extruded
cellulose are important factors in maintaining its product quality and
operating efficiencies.

Viskase's product line includes NOJAX(r) cellulosic casings for small-
diameter processed meat products, such as hot dogs, Precision(r) and
Zephyr(r) for large diameter processed meats and ham products, fibrous or
large-diameter casings, which are paper-reinforced cellulosic casings used in
the production of large-diameter sausages, salami, hams and other processed
meat products, and Visflex(tm) and Vismax(tm) plastic casing used for a wide
range of processed meat, poultry and cheese applications.

International Operations

Viskase has four manufacturing and/or finishing facilities located outside
the continental United States, in Beauvais, France; Thaon, France; Guarulhos,
Brazil and Caronno, Italy.

The aggregate of domestic exports and net sales of foreign operations
represents approximately 56.0% of Viskase's total net sales.

International sales and operations may be subject to various risks including,
but not limited to, possible unfavorable exchange rate fluctuations,
political instability, governmental regulations (including import and export
controls), restrictions on currency repatriation, embargoes, labor relations
laws and the possibility of governmental expropriation. Viskase's foreign
operations generally are subject to taxes on the repatriation of funds.

International operations in certain parts of the world may be subject to
international balance of payments difficulties that may raise the possibility
of delay or loss in the collection of accounts receivable from sales to
customers in those countries. Viskase believes its allowance for doubtful
accounts makes adequate provision for the collectibility of receivables.
Management believes that growth potential exists for many of Viskase's
products outside the United States and that Viskase is well positioned to
participate in these markets. While overall consumption of processed meat
products in North America and Western Europe is stable, there is a potential
for market growth in Eastern Europe, Latin America and Southeast Asia.

<PAGE>
Sales and Distribution

Viskase has a broad base of customers, with no single customer accounting for
more than 6% of sales. Viskase sells its products in virtually every country
in the world. In the United States, Viskase has a staff of technical sales
teams responsible for sales to processed meat and poultry producers.
Approximately 77 distributors market Viskase products to customers in Europe,
Africa, the Middle East, Asia, and Latin America. Its products are marketed
through its own subsidiaries in France, Germany, Italy, Poland and Brazil. As
of December 31, 2002 and 2001, Viskase had backlog orders of approximately
$18.3 million and $20.0 million, respectively.

Viskase maintains ten service and distribution centers worldwide. The service
centers perform limited product finishing and provide sales, customer
service, warehousing and distribution. Distribution centers provide only
warehousing and distribution.

In North America, Viskase operates distribution centers in Atlanta, Georgia;
Buffalo, New York; Fresno, California; Remington, Indiana; Saskatoon,
Saskatchewan, Canada and Lindsay, Ontario, Canada. Viskase operates a service
center in Guarulhos, Brazil, and in Europe, Viskase operates a service center
in Caronno, Italy and distribution centers in Dormagen, Germany and Warsaw,
Poland.

Competition

Viskase is one of the world's leading producers of cellulosic casings.
Viskase seeks to maintain a competitive advantage by manufacturing products
having outstanding quality and superior performance characteristics over
competitive products, by responding quickly to customer product requirements,
by providing technical support services to its customers for production and
formulation opportunities and by producing niche products to fill individual
customer requirements. During the previous five years, Viskase has
experienced reduced profits due to over-capacity in the industry and intense
price competition.

Viskase's principal competitors in cellulosic casings are Teepak LLC, located
in the United States with plants in the United States and Belgium; Viscofan,
S.A., located in Spain, Germany, Brazil, Czech Republic and the United
States; Kalle Nalo GmbH, located in Germany; Case Tech, a wholly owned
subsidiary of Bayer AG, located in Germany; Oy Visko AB located in Finland;
KoSa, located in Mexico and the United States and two Japanese manufacturers,
Futamura Chemical marketed by Meatlonn, and Toho.

Viskase's primary competitors include several major corporations that are
larger and better capitalized than Viskase.

Research and Development; Customer Support

Viskase's continuing emphasis on research and development is central to its
ability to maintain industry leadership. In particular, Viskase focuses on
the development of new products that increase customers' operating
efficiencies, reduce their operating costs and expand their markets.
Viskase's projects include development of new processes and products to
improve its manufacturing efficiencies. Viskase's research scientists,
engineers and technicians are engaged in continuing product and equipment
development and also provide direct technical and educational support to its
customers.

Viskase believes it has achieved and maintained its position as a leading
producer of cellulosic casings for packaging meats through significant
expenditures on research and development. The Company expects to continue its
research and development efforts. The commercialization of certain of these
product and process applications and related capital expenditures to achieve
commercialization may require substantial financial commitments in future
periods. Research and development costs from continuing operations are
expensed as incurred and totaled $4,070 thousand, $4,837 thousand, and $5,474
thousand for 2002, 2001, and 2000, respectively.

<PAGE>
Seasonality

Historically, domestic sales and profits of Viskase have been seasonal in
nature, increasing in the spring and summer months. Sales outside of the
United States follow a relatively stable pattern throughout the year.

Raw Materials

Raw materials used by Viskase include cellulose (from wood pulp), specialty
fibrous paper, and various other chemicals. Viskase generally purchases its
raw materials from a single source or small number of suppliers with whom it
maintains good relations. Certain primary and alternative sources of supply
are located outside the United States. Viskase believes, but there can be no
assurance, that adequate alternative sources of supply currently exist for
all of Viskase's raw materials or that raw material substitutes are
available, which Viskase could modify its processes to utilize.

Employees

The Company maintains productive and amicable relationships with its
approximately 1,380 employees worldwide. One of Viskase's domestic plants,
located in Loudon, Tennessee, is unionized, and all of its European and
Brazilian plants have National Agreements with annual renewals. Employees at
the Company's European plants have negotiations occurring at both local and
national levels. Based on past experience and current conditions, the Company
does not expect protracted work stoppages to occur stemming from union
activities; however, national events outside of the Company's control may
give rise to such risk. Unions represent approximately 575 of Viskase's 1,380
employees.

Trademarks and Patents

Viskase holds patents on many of its major technologies, including those used
in its manufacturing processes and the technology embodied in products sold
to its customers. The Company believes its ongoing market leadership benefits
from its technology. Viskase vigorously protects and defends its patents
against infringement by competitors on an international basis. As part of its
research and development program, Viskase has developed and expects to
continue to develop new proprietary technology and has licensed proprietary
technology from third parties. Management believes these activities will
enable Viskase to maintain its competitive position. Viskase also owns
numerous trademarks and registered trade names that are used actively in
marketing its products. Viskase periodically licenses its process and product
patents to competitors on a royalty basis.

Environmental Regulations

In manufacturing its products, the Company employs certain hazardous
chemicals and generates toxic and hazardous wastes. The use of these
chemicals and the disposal of such waste are subject to stringent regulation
by several governmental entities, including the United States Environmental
Protection Agency (USEPA) and similar state, local and foreign environmental
control entities. The Company is subject to various environmental, health and
safety laws, rules and regulations including those of the United States
Occupational Safety and Health Administration and USEPA. These laws, rules
and regulations are subject to amendment and to future changes in public
policy or interpretation, which may affect the operations of the Company. The
Company uses its best reasonable efforts to comply with promulgated laws,
rules and regulations and participates in the rulemaking process.

Certain of the Company's facilities are or may become potentially responsible
parties with respect to off-site waste disposal facilities.

<PAGE>
As noted above, new environmental and health and safety laws can impose
significant compliance costs, including forthcoming rules. Under the Clean
Air Act Amendments of 1990, various industries, including casings
manufacturers, will be required to meet air emissions standards for certain
chemicals based on use of the "maximum achievable control technology" (MACT).
MACT Standards for new and existing cellulose casing manufacturing sources
were promulgated June 11, 2002. Viskase submitted extensive comments to the
EPA during the public comment period. Compliance with the new rules is
required within three years (by June 13, 2005). MACT rules will apply to all
casing manufacturers in the United States.

Under the Resource Conservation and Recovery Act (RCRA), regulations have
been proposed that, in the future, may impose design and/or operating
requirements on the use of surface impoundments of wastewater. Two of
Viskase's plants use surface impoundments. The Company does not foresee these
regulations being imposed for several years.

(d)     Financial information about foreign and domestic operations and
export sales

Reference is made to Part IV, Item 15, Note 24 of Notes to Consolidated
Financial Statements.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth the names and ages of the Company's executive
officers, together with the positions with the Company held by such executive
officers, and a summary of their recent business experience. Under the
Company's Amended and Restated By-Laws, the Company's officers are elected
for such terms as may be determined from time to time by the Board of
Directors.

Name, Age and Office         Business Experience
F. Edward Gustafson, 61,     Mr. Gustafson has been Chairman of the Board,
Chairman of the Board,       President and Chief Executive Officer of the
President and Chief          Company since March 1996 and
Executive Officer            a director of the Company since December 1993.
                             (Mr. Gustafson has been President and Chief
                             Executive Officer of Viskase since June 1998,
                             and previously from February 1990 to August
                             1994.) From May 1989 to March 1996 Mr. Gustafson
                             served as Executive Vice President and Chief
                             Operating Officer of the Company. Mr. Gustafson
                             has also served as Executive Vice President and
                             Chief Operating Officer of D.P. Kelly and
                             Associates, L.P. (DPK) since November 1988.

Gordon S. Donovan, 49,       Mr. Donovan has been Chief Financial Officer of
Vice President, Chief        the Company since January 1997 and Vice
Financial Officer, Treasurer President and Chief Financial Officer
Assistant Secretary          of Viskase since June 1998. Mr. Donovan has
                             served as Treasurer and Assistant Secretary
                             of the Company since November 1989 and as Vice
                             President since May 1995.

Kimberly K. Duttlinger, 38,  Ms. Duttlinger has been Vice President,
Vice President, Secretary    Secretary and General Counsel of the Company
and General Counsel          since April 2000. From August 1998 through April
                             2000, Ms. Duttlinger served as Associate General
                             Counsel of the Company. From May 1997 to August
                             1998, Ms. Duttlinger served as Corporate Counsel
                             of the Company.

<PAGE>
ITEM 2.   PROPERTIES

VISKASE FACILITIES

LOCATION     SQUARE FEET     PRIMARY USE

Manufacturing Facilities

  Beauvais, France (a)    235,000   Casings production and finishing
  Caronno, Italy           73,000   Casings finishing
  Chicago, Illinois       991,000   Idle plant facilities held for sale
  Guarulhos, Brazil (a)    25,000   Casings finishing
  Kentland, Indiana       125,000   Casings finishing
  Loudon, Tennessee       250,000   Casings production
  Osceola, Arkansas       223,000   Casings production and casings finishing
  Thaon, France           239,000   Casings finishing

Distribution Centers

  Atlanta, Georgia (a)
  Buffalo, New York (a)
  Fresno, California (a)
  Remington, Indiana (a)
  Dormagen, Germany (a)
  Saskatoon, Saskatchewan, Canada (a)
  Lindsay, Ontario, Canada
  Warsaw, Poland (a)

Service Centers

  Guarulhos, Brazil (a)
  Caronno, Italy

Headquarters

  Worldwide:  Willowbrook, Illinois (a)
  Europe       Pantin, France (a)

(a)  Leased. All other properties are owned.

The Company believes that its properties generally are suitable and adequate
to satisfy the Company's present and anticipated needs. The Company's United
States real property collateralizes the Company's obligations under various
financing arrangements. For a discussion of these financing arrangements,
refer to Part IV, Item 15, Note 8 of Notes to Consolidated Financial
Statements.

ITEM 3.   LEGAL PROCEEDINGS

In 1988, Viskase Canada Inc. (Viskase Canada), a subsidiary of the Company,
commenced a lawsuit against Union Carbide Canada Limited and Union Carbide
Corporation in the Ontario Superior Court of Justice, Court File No.:
292270188 seeking damages resulting from Union Carbide's breach of
environmental representations and warranties under the Amended and Restated
Purchase and Sale Agreement, dated January 31, 1986 (Agreement). Pursuant to
the Agreement, Viskase Corporation and various affiliates (including Viskase
Canada) purchased from Union Carbide and Union Carbide Films Packaging, Inc.,
its cellulosic casings business and plastic barrier films business
(Business), which purchase included a facility in Lindsay, Ontario, Canada
(Site). Viskase Canada is claiming that Union
<PAGE>
Carbide breached several representations and warranties and deliberately
failed to disclose to Viskase Canada the existence of contamination on the
Site.

In October 2001, the Canadian Ministry of the Environment (MOE) notified
Viskase Canada that it had evidence to suggest that the Site was a source of
polychlorinated biphenyl (PCB) contamination. Viskase Canada is working with
the MOE in investigating the alleged PCB contamination and developing and
implementing, if appropriate, a remedial plan for the Site. Viskase Canada
has been advised by the MOE that the MOE expects to issue certain Director's
Orders requiring remediation under applicable environmental legislation
against Viskase Canada and others in the next few months. Viskase Canada has
been granted leave to amend its lawsuit against Union Carbide to allege that
any PCB contamination at or around the Site was generated from Union
Carbide's plastics extrusion business, which was operated at the Site by
Union Carbide prior to the purchase of the Business. Union Carbide's plastics
extrusion business was not part of the Business purchased by Viskase
Corporation and its affiliates. Viskase Canada expects to amend the lawsuit
prior to June 1, 2003. Viskase Canada will be asking the court to require
Union Carbide to repurchase the Site from Viskase Canada and award Viskase
Canada damages in excess of $2.0 million (Canadian). The Company has reserved
$.5 million (U.S.) for the property remediation. The lawsuit is still pending
and is expected to proceed to trial sometime during the second half of 2004.

In August 2001, the Department of Revenue of the Province of Quebec, Canada
issued an assessment against Viskase Canada in the amount of $2,669,501.48
(Canadian) plus interest and possible penalties. This assessment is based
upon Viskase Canada's failure to collect and remit sales tax during the
period July 1, 1997 to May 31, 2001. During this period Viskase Canada did
not collect and remit sales tax in Quebec on reliance of the written advice
of its outside accounting firm. Viskase Canada filed a Notice of Objection in
November 2001 with supplementary submission in October 2002. No decision has
been made on the Notice of Objection. The ultimate liability for the Quebec
sales tax lies with the customers of Viskase Canada during the relevant
period. The Company has, however, provided for a reserve of $.3 million
(U.S.) for interest and penalties, if any. Viskase Canada is negotiating with
the Quebec Department of Ministry to avoid having to collect the sales tax
from customers who will then be entitled to credit for such sales tax
collected.

In March 1997, Viskase received a subpoena from the Antitrust Division of the
United States Department of Justice (DOJ) relating to a grand jury
investigation of the sausage casings industry. In September 1999, Viskase
received a subpoena from the DOJ relating to the expansion of the grand jury
investigation into the specialty plastic films industry. During October 2002,
Viskase was advised by the DOJ that it has closed the investigation of the
sausage casings and specialty plastic films industries and that no action
will be taken.

During 1999 and 2000, the Company and certain of its subsidiaries and one
other sausage casings manufacturer were named in ten virtually identical
civil complaints filed in the United States District Court for the District
of New Jersey by the following plaintiffs: Smith Provision Co., Inc.; Parks
LLC (d/b/a Parks Sausage Company); Real Kosher Sausage Company, Inc.; Sahlen
Packing Co., Inc.; Marathon Enterprises, Inc.; Ventures East, Inc.;
Keniston's, Inc.; Smithfield Foods, Inc.; Clougherty Packing Co.; and Klement
Sausage Co. The District Circuit ordered all of these cases consolidated in
Civil Action No. 99-5195-MLC (D.N.J.). Each complaint brought on behalf of a
purported class of sausage casings customers alleges that the defendants
unlawfully conspired to fix prices and allocate business in the sausage
casings industry. In 2001, all of the consolidated cases were transferred to
the United States District Court for the Northern District of Illinois,
Eastern Division. The Company strongly denies the allegations set forth in
these complaints and intends to vigorously defend these claims.

In February 2003, the plaintiffs (other than Marathon Enterprises, Inc. which
has elected not to pursue its lawsuit against the Company) amended their
complaint to eliminate any claim against the Company that arose prior to
December 17, 1993. In March 2003, the Company filed a Motion to Dismiss the
amended complaint.

<PAGE>
The Company and its subsidiaries are involved in these and various other
legal proceedings arising out of their business and other environmental
matters, none of which is expected to have a material adverse effect upon
results of operations, cash flows or financial condition.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

<PAGE>
PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS

(a)       Market Information. The Company's Common Stock is traded in the
over-the-counter market. The high and low closing bid prices of the Common
Stock during 2002 and 2001 are set forth in the following table. Such prices
reflect interdealer prices without markup, markdown or commissions and may
not represent actual transactions.

<TABLE>
<CAPTION>
2002    First Quarter    Second Quarter    Third Quarter    Fourth Quarter
<S>  <C>              <C>               <C>              <C>

High         .045              .08              .06              .035
Low          .020              .01              .02              .002
</TABLE>

<TABLE>
<CAPTION>
2001    First Quarter    Second Quarter    Third Quarter    Fourth Quarter
<S>  <C>              <C>               <C>              <C>

High        $2.00             $2.06            $1.50             $.30
Low           .92               .90              .25              .01
</TABLE>

(b)       Holders. As of March 21, 2003, there were approximately 106 holders
of record and approximately 2,700 beneficial holders of the Company's Common
Stock.

(c)       Dividends. The Company has never paid a cash dividend on shares of
its Common Stock. The payment of dividends is restricted by the terms of
various financing agreements to which the Company is a party. The Company has
no present intention of paying dividends in the foreseeable future.

<PAGE>
ITEM 6.   SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                Year Ended                        53 Weeks Ending
                                                 ----------------------------------------   ---------------------------
                                                 December       December       December       December     December
                                                 31, 2002       31, 2001      31, 2000(1)   31, 1999(1)  31, 1998(1)(2)
                                                 -------        --------      -----------   -----------  --------------
                                                               (in thousands, except for per share amounts)

<S>                                           <C>            <C>            <C>            <C>            <C>
Net sales                                        $183,577       $189,315       $200,142       $225,767       $246,932
(Loss) from continuing
  operations (3)                                  (19,330)       (36,852)       (95,967)       (29,927)      (147,871)
Income (loss) from discontinued
  operations                                                                      3,435         (1,831)       (33,389)
Gain on sales of discontinued operations                           3,189         68,185                        39,057
(Loss) before extraordinary item (3)              (19,330)       (33,663)       (24,347)       (31,758)      (142,203)

Net (loss) (4)                                    (19,330)       (25,526)       (17,836)       (31,758)      (148,996)

Per share (loss)
  from continuing operations
  - basic and diluted (3)                           (1.26)         (2.41)         (6.34)         (2.00)         (9.97)

Per share income (loss)
  from discontinued operations
  - basic and diluted                                                               .23           (.12)         (2.25)
    Gain on sale of discontinued operations                          .21           4.50                          2.63

Per share (loss)
  before extraordinary item
  - basic and diluted
    (Loss) per share  (3)                           (1.26)         (2.20)         (1.61)         (2.12)         (9.59)

Per share net (loss)
  - basic and diluted
    (Loss) per share  (4)                           (1.26)         (1.67)         (1.18)         (2.12)        (10.05)

Cash and equivalents                               27,700         25,540         55,350          6,243          9,028
Restricted cash                                    28,347         26,558         41,038
Working capital                                  (174,203)      (178,952)      (106,958)        34,480         41,725
Total assets                                      218,681        234,028        322,364        493,818        531,069

Debt obligations:
  Short-term debt (5) (6) (7)                     227,343        236,059        200,676         23,095         16,120
  Long-term debt                                       85            194         73,183        404,151        388,880
Stockholders' (deficit)                          (175,146)      (138,053)      (107,397)       (89,442)       (55,907)
Cash dividends                                       none           none           none           none           none
</TABLE>

(1)  Year 2000 and 1999 and fiscal year 1998 net sales and loss from
     continuing operations exclude the results of the Films Business, which
     was sold in 2000.

(2)  Fiscal 1998 net sales and loss from continuing operations exclude the
     results of Sandusky and Clear Shield, which were sold in 1998.

(3)  Included in 2002 is net restructuring income of $6,132 and
     reorganization expense of $3,401.
     Included in 2001 is an asset write-down of $4,766 and an inventory lower
     of cost or market charge of $3,612.
     Included in 2000 and 1998 are restructuring charges of $94,910 and
     $119,579, respectively.

(4)  Includes a net extraordinary gain (loss) on debt extinguishment of
     $8,137, $6,511 and $(6,793) or $.53, $.43 and $(.46) per share in 2001,
     2000 and 1998, respectively. SFAS No. 145 requires that gains and losses
     on debt extinguishment will no longer be classified as extraordinary for
     fiscal years beginning after May 15, 2002. In 2003 these prior period
     extraordinary items will be reclassified in the consolidated statements
     of operations.

(5)  Year 2002 includes $163,060 of debt classified as current liabilities
     subject to compromise on the balance sheet.

(6)  Years 2002 and 2001 include $64,106 of long-term debt reclassified to
     current due to covenant restrictions.

(7)  Years 2001 and 2000 include the current portion of long-term debt.

<PAGE>
ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

Results of Operations

The Company's 2002 net sales from continuing operations was $183.6 million,
which represents a decrease of 3% from 2001. The decline in sales reflects
the continuing effect of reduced selling prices in the worldwide casings
industry and slightly lower volumes, offset by the strengthening Euro against
the U.S. Dollar that positively benefited net sales by approximately $3.2
million.

The Company's 2001 net sales from continuing operations was $189.3 million,
which represented a decrease of 5.4% from 2000. The decline in sales reflects
the continuing effect of reduced selling prices in the casings industry and
lower sales volumes in Europe due to outbreaks of both mad cow disease and
foot-and-mouth disease during the first half of 2001.

With the entrance of a foreign competitor in the mid-1990's, the Company
experienced significant pricing pressure and volume loss. The market for
cellulosic casings has continued to see price declines each year based on
competitor factors including excess production capacity. The Company does not
expect to experience significant future volume loss; however, the Company
believes pricing pressures will continue. The Company has previously
implemented facility realignment and other cost-cutting measures aimed at
offsetting the effect of lower prices.

The operating income from continuing operations for 2002 was $2.3 million.
Operating income includes net restructuring income of $6.1 million recognized
in the second quarter of 2002. The restructuring income is the result of a
reversal of $9.3 million of excess reserves that were originally recorded in
2000 due to the negotiation of reduced Nucel(r) technology third party
license fees, offset by a year 2002 restructuring charge of $3.2 million.
During the second quarter of 2002, the Company committed to a restructuring
plan to address the industry's competitive environment. Operating loss from
continuing operations, excluding the net restructuring income of $6.1
million, was $(3.8) million. This (loss) compares favorably to the operating
loss from the comparable prior year period of $(5.4) million, excluding the
2001 asset write-down and the 2001 lower of cost or market charge as
described below. The improvement in the operating loss results primarily from
operating efficiencies from previous cost saving measures and reduced raw
material costs. The Company does not, however, expect to see additional
improvement in its operating income until prices begin to increase in the
industry.

The operating loss from continuing operations for 2001 was $(13.7) million.
The 2001 operating loss included an asset write-down of $4.8 million for the
write-down of Viskase's Chicago facility to fair value and a $3.6 million
write-down of inventories to its lower of cost or market value included in
cost of sales. Operating loss from continuing operations, excluding the asset
write-down and lower of cost or market charge, was $(5.4) million. This
compares unfavorably to the 2000 operating income of $1.2 million, excluding
the 2000 restructuring charge of $94.9 million. The decrease in operating
income resulted primarily from declines in sales and gross margins caused by
continued price competition in the worldwide casings industry.

Net interest expense from continuing operations for 2002 totaled $21.1
million, which represented a decrease of $1.9 million from 2001. The decrease
is primarily due to reduced interest expense related to the GECC lease
payment.

Other income (expense) from continuing operations of approximately $1.5
million and $(3.4) million in 2002 and 2001, respectively, consists
principally of foreign exchange gains and (losses).

The reorganization expenses of $3.4 million consist principally of fees for
legal, financial advisory and professional services incurred due to the
Chapter 11 proceeding.

<PAGE>
In 2000, the Company received a payment in resolution of the American
National Can Company (ANC) Litigation in the amount of $54.75 million, offset
by patent litigation expenses of $7.85 million.

The Company purchases gas futures contracts to lock in set rates on gas
purchases. The Company uses this strategy to minimize its exposure to
volatility in natural gas. These products are not linked to specific assets
and liabilities that appear on the balance sheet or to a forecasted
transaction and, therefore, do not qualify for hedge accounting. As such, the
loss on the change in fair value of the futures contracts was recorded in
other income and is immaterial.

In 2002, the tax benefit of $(1.3) million on the (loss) from continuing
operations before income taxes of $(20.6) million resulted from the benefit
of a U.S. income tax refund resulting from the Job Creation Act enacted in
March 2002, offset by the tax provision related to operations of foreign
subsidiaries.

In 2001, the income tax benefit from the loss from continuing operations
offset the income tax provision which would have been provided on the
extraordinary gain and the gain from the sale of discontinued operations. The
net benefit recognized of $(3.4) million results from a reduction of prior
accrued foreign taxes payable. A provision (benefit) of $(3.4) million and
$.7 million, respectively, was provided on loss from continuing operations
before taxes of $(40.2) million and $(95.2) million, respectively for 2001
and 2000. The company's effective tax rate from continuing operations reflect
the permanent differences in the U.S. resulting from the change in the
valuation allowance and the reversal of over-accrued foreign taxes. The tax
provision (benefit) for income from discontinued operations in 2000 was $.3
million. The tax provision with respect to the gain on disposal in 2001 and
2000 was $0 and $6.6 million, respectively. In addition, an extraordinary
gain in 2001 and 2000 recognized an income tax provision of $0 and $.6
million, respectively. The total income tax provision (benefit) was $(1.3)
million, $(3.4) million, and $8.3 million, respectively, in 2002, 2001 and
2000.

Net domestic cash income taxes (refunded) paid in 2002, 2001 and 2000, were
$(2.1) million, $2.2 million and $.5 million, respectively. Net foreign cash
income taxes paid during the same periods were $.9 million, $2.5 million and
$.3 million, respectively.

Discontinued Operations

On January 17, 2000, the Company's Board of Directors announced its intent to
sell the Company's plastic barrier and non-barrier shrink Films Business. The
sale of the Films Business was completed on August 31, 2000. The aggregate
proceeds of $255 million, including a working capital adjustment of $10.3
million, were used to retire debt, pay General Electric Capital Corporation
(GECC) and for general corporate purposes. The Company recognized a net gain
in the amount of $3.2 million in 2001 and $68.2 million in 2000. The business
sold included production facilities in the United States, United Kingdom, and
Brazil. In conjunction with the sale of the Films Business, the Company shut
down its oriented polypropylene (OPP) films business located in Newton
Aycliffe, England and the films operation in Canada; the costs of these are
included in the business discontinuance.

Liquidity and Capital Resources

Cash and equivalents increased by $2.2 million during the year ended December
31, 2002. Cash flows provided by operating activities were $18.3 million,
used for reorganization items were $1.3 million, used in investing activities
were $5.0 million, and used in financing activities were $8.9 million. Cash
flows provided by operating activities were principally attributable to the
effect of depreciation, amortization, and a decrease in working capital
usage. Cash flows used for reorganization items consist principally of fees
for legal, financial advisory and professional services incurred due to the
Chapter 11 proceeding. Cash flows used in investing activities were
principally attributable to capital expenditures for property, plant and
equipment, an increase in restrictions on cash offset by the proceeds on
disposition of assets. Cash flows used in financing activities principally
consisted of the payment of the scheduled GECC capital lease obligation.

<PAGE>
In 2001 and 2000 the Company was able to purchase 10.25% Notes in open market
or privately negotiated transactions, with the effect that as of December 31,
2002 there was $163.1 million principal amount of 10.25% Notes outstanding,
net of repurchased notes. The Company was able to repurchase debt due to the
sale of the Films business in 2000. The Company recognized an $8.1 million
net gain on the repurchase of Notes during 2001 and a $6.5 million net gain
in 2000.

Cash flows from operations for the Company were insufficient to pay the
Senior Notes when they matured on December 1, 2001, and accordingly the
Company did not pay the $163.1 million principal and $8.4 million interest
that became due at that time. In September 2001, certain of the holders of
the Senior Notes formed an Ad Hoc Committee to participate in the development
of a plan to restructure the Company's capital structure and address its
future cash flow needs. On July 15, 2002, the Company executed a
restructuring agreement with the Ad Hoc Committee for the restructuring of
the Senior Notes. Under terms of the restructuring agreement, on or about
August 21, 2002 the Company initiated an exchange offer to exchange the
Senior Notes for New Notes and shares of Preferred Stock. The proposed
exchange offer was subject to acceptance by holders of 100% of the
outstanding Senior Notes, unless waived by the Company and approved by the Ad
Hoc Committee. The exchange offer was conducted simultaneously with a
solicitation for the Plan for the Company which required the consent of a
majority in number of the holders and at least 66-2/3% in principal amount of
Senior Notes actually voting in the solicitation. Under the restructuring
agreement, if less than 100% of the outstanding Senior Notes accepted the
exchange offer, but a sufficient number of holders and aggregate amount of
Senior Notes voted in favor of acceptance of the Plan, the Company agreed to
commence a voluntary Chapter 11 petition to seek confirmation of the Plan.
The Plan contains substantially the same economic terms as the exchange
offer.

Although 100% of the outstanding Senior Notes did not accept the exchange
offer, the Company did receive votes to accept the Plan from approximately
91.4% of the holders and 91.4% in the outstanding principal amount that
actually voted. Accordingly, on November 13, 2002, VCI filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court
to seek confirmation of the Plan. Under Chapter 11, the Company may operate
its business in the ordinary course, subject to prior Bankruptcy Court
approval of transactions outside the ordinary course and certain other
matters.

The Chapter 11 filing was for VCI only. The Chapter 11 filing does not
include any of the Company's domestic or foreign operating subsidiaries.
Therefore, the Company's operating subsidiaries continued to provide an
uninterrupted supply of products and services to customers worldwide. Trade
creditors and vendors have been totally unaffected and continue to be paid in
the ordinary course of business, and the operating subsidiaries' employees
have been paid all wages, salaries and benefits on a timely basis.

Letters of credit in the amount of $27.6 million were outstanding under
letter of credit facilities with commercial banks, and were cash
collateralized at December 31, 2002.

The Company finances its working capital needs through a combination of
internally generated cash from operations, cash on hand, and a revolving
credit facility that the Company anticipates that it will enter into upon
emergence from bankruptcy.

Certain identified production and finishing equipment at Viskase's domestic
facilities are subject to a capital lease with GECC. In connection with the
lease, GECC holds a security interest in (i) all domestic accounts receivable
(including intercompany receivables) and inventory; (ii) all patents,
trademarks and other intellectual property (subject to non-exclusive
licensing agreements); (iii) substantially all domestic fixed assets; and
(iv) certain real property and improvements thereon. The security interest
will be subordinated to the working capital facility.

<PAGE>
The GECC capital lease obligations were classified as current in the
financial statements due to covenant restrictions. The following lease
payment maturities conform to contractual payments under the lease:

                            (in thousands)

     February 28, 2003          $18,499
     April 11, 2003             $ 5,000
     February 28, 2004          $11,750
     August 28, 2004            $11,749
     February 28, 2005          $23,500

GECC has agreed, subject to certain conditions, not to accelerate payment of
amounts due because of any default or event of default under any of the lease
documents arising from (i) the Company's failure to meet the Fixed Charge
Coverage Ratio for the fiscal quarters ending on March 31, 2002, June 30,
2002, September 30, 2002 and December 31, 2002 and (ii) the Company becoming
a debtor under Chapter 11 of the Bankruptcy Code until April 21, 2003. There
is no agreement with GECC to extend the forbearance beyond April 21, 2003.
However, the Company and GECC have agreed to amend certain lease documents
upon the emergence from bankruptcy. The amendment will permanently waive
prior non-compliance with the Fixed Charge Coverage Ratio and establish a new
Fixed Charge Coverage Ratio for the remainder of the lease term. The
amendment also changes the February 28, 2004 lease payment with $11,750 due
on February 28, 2004 and $11,749 due on August 28, 2004.

Under Chapter 11, certain claims against VCI (the Debtor) in existence prior
to the Petition Date were stayed while the Company continued business
operations as a debtor-in-possession. These claims are reflected in the
December 31, 2002 balance sheet as "Current liabilities subject to
compromise." As of the Petition Date, the Company stopped accruing interest
on the 10.25% Senior Notes. The interest not accrued from the Petition Date
through December 31, 2002 is $2.3 million.

The principal categories of claims reclassified in the Consolidated Balance
Sheets and included in Current liabilities subject to compromise are
identified below. These amounts may be subject to future adjustments
depending on Bankruptcy Court actions, further developments with respect to
disputed claims, the existence and value of any collateral securing such
claims and other events. At the Petition Date the amounts reflected below are
for the Senior Notes and accrued interest through the Petition Date.

Current liabilities subject to compromise are as follows (refer to Note 1 to
the consolidated financial statements):

                                      (in thousands)

     10.25% Senior Notes                 $163,060
     Accrued interest                      25,098
     Other current liabilities                 40
                                         --------
                                         $188,198
                                         ========

Capital expenditures for continuing operations for the year ended December
31, 2002 and 2001 totaled $3.8 and $5.9 million, respectively. Significant
2002 expenditures included costs associated with the Viskase Food Science
Quality Institute (FSQI) and numerous smaller projects throughout the plants
worldwide. Significant 2001 capital expenditures for continuing operations
included costs associated with the Visflex(tm) and Vismax(tm) plastic casing
product line and the corporate office relocation. Significant 2000 capital
expenditures for continuing operations included costs associated with the
Nucel(r) project. Capital expenditures in 2000 for discontinued operations
included additional production capacity for specialty films. Capital
expenditures for 2003 are expected to increase approximately $7 million. The
increase is related to the installation of environmental equipment to conform
with MACT standards for casing manufacturers.

<PAGE>
At December 31, 2002, the Company had capital expenditure commitments
outstanding of approximately $.3 million. The Company also has lease
agreements for machinery, equipment and facilities during 2002;
rent expenses on these were $2.0 million. Accordingly, the Company does not
consider its operating lease commitments to be a significant determinant of
the Company's liquidity.

In 2002 and 2001, the Company spent approximately $4.1 million and $5.0
million, respectively, on research and development programs, including
product and process development, and on new technology development. Prior to
2001, the Company was spending approximately $8 million on research and
development programs. The decrease is due to the sale of the Films Business
and mothballing the Nucel(r) project. The 2003 research and development and
product introduction expenses are expected to be approximately $4.0 million.
Among the projects included in the current research and development efforts
are the anti-listeria NOJAX(r) AL(tm) casing, SmokeMaster(tm) casing, and the
application of certain patents and technology being licensed by Viskase to
the manufacture of cellulosic casings.

The accompanying consolidated financial statements have been prepared in
accordance with the American Institute of Certified Public Accounts Statement
of Position 90-7: Financial Reporting by Entities in Reorganization under the
Bankruptcy Code and have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which contemplates
continuity of operations and assumes the realization of assets and
liquidation of liabilities in the ordinary course of business.

Following the approval of a plan of reorganization, SOP 90-7 requires that
the Company adopt "Fresh Start" accounting resulting in recording all assets
and liabilities at fair value. Upon emergence from bankruptcy, the amounts
and classifications reported in the consolidated historical financial
statements could materially change.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions in certain circumstances that affect amounts
reported in the accompanying financial statements. In preparing these
financial statements, management bases its estimates on historical experience
and other assumptions that they believe are reasonable. The Company does not
believe there is a great likelihood that materially different amounts would
be reported under different conditions or using different assumptions related
to the accounting policies described below. However, application of these
accounting policies involves the exercise of judgment and use of assumptions
as to uncertainties and, as a result, actual results could differ from these
estimates. If actual amounts are ultimately different from previous
estimates, the revisions are included in the Company's results for the period
in which the actual amounts become known. Historically, the aggregate
differences, if any, between the Company's estimates and actual amounts in
any year have not had a significant impact on the Company's consolidated
financial statements. The "Summary of Significant Accounting Policies" is
included as Note 2 of The Notes To Consolidated Financial Statements.

Revenue Recognition

Substantially all of the Company's revenues are recognized at the time
products are shipped to customers, under F.O.B. Shipping Point and F.O.B.
Port Terms. Revenues are net of any discounts and allowances. The Company
records all related shipping and handling costs as a component of cost of
goods sold. The SEC's Staff Accounting Bulletin (SAB) No. 101, "Revenue
Recognition in Financial Statements", provides guidance on the application of
generally accepted accounting principles to selected revenue recognition
issues. The Company's revenue recognition policy is in accordance with
generally accepted accounting principles and SAB No. 101.

<PAGE>
Allowance for Doubtful Accounts Receivable

Accounts receivable have been reduced by an allowance for amounts that may
become uncollectible in the future. This estimated allowance is primarily
based upon management's evaluation of the financial condition of the
customer, the customer's ability to pay and historical write-offs.

Allowance for Obsolete and Slow Moving Inventories

Inventories are valued at the lower of cost or market. The inventories have
been reduced by an allowance for slow moving and obsolete inventories. The
estimated allowance is based upon management's estimate of specifically
identified items and historical write-offs of obsolete and excess
inventories.

Deferred Income Taxes

Deferred tax assets and liabilities are measured using enacted tax laws and
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities due to a change in tax rates is
recognized in income in the period that includes the enactment date. In
addition, the amounts of any future tax benefits are reduced by a valuation
allowance to the extent such benefits are not expected to be realized on a
more likely than not basis.

Pension Plans and Other Postretirement Benefit Plans

The measurements of liabilities related to pension plans and other
postretirement benefit plans are based upon management's assumptions related
to future events including interest rates, return on pension plan assets,
rate of compensation increases, and health care cost trend rates. The Company
reviews its actuarial assumptions on an annual basis and makes modifications
to the assumptions based on current rates and trends when it is deemed
appropriate to do so. As required by generally accepted accounting
principles, the effect of the modifications is generally recorded or
amortized over future periods.

Property, Plant and Equipment

The Company carries property, plant and equipment at cost less accumulated
depreciation. Property and equipment additions include acquisition of
property and equipment and costs incurred for computer software purchased for
internal use including related external direct costs of materials and
services and payroll costs for employees directly associated with the
project. Depreciation is computed on the straight-line method over the
estimated useful lives of the assets ranging from 2 to 32 years. Upon
retirement or other disposition, cost and related accumulated depreciation
are removed from the accounts, and any gain or loss is included in results of
operations.

Long-Lived Assets

The Company continues to evaluate the recoverability of long-lived assets
including property, plant and equipment and patents. Impairments are
recognized when the expected undiscounted future operating cash flows derived
from long-lived assets are less than their carrying value.

Other Matters

The Company does not have off-balance sheet arrangements, sometimes referred
to as "special purpose entities," financing or other relations with
unconsolidated entities or other persons. In the ordinary course of business,
the Company leases certain casing manufacturing and finishing equipment,
certain real property, consisting of manufacturing and distribution
facilities and office facilities. The casing manufacturing and finishing
equipment capital lease obligation is described under "Debt Obligations,"
Note 8 of Notes to Consolidated Financial Statements. Operating leases are
described under "Operating Leases," Note 9 of Notes to Consolidated Financial
Statements.

<PAGE>
Transactions with related parties are in the ordinary course of business, are
conducted at an arm's length basis, and are not material to the Company's
financial position, results of operations or cash flows.

Contingencies

In 1988, Viskase Canada Inc. (Viskase Canada), a subsidiary of the Company,
commenced a lawsuit against Union Carbide Canada Limited and Union Carbide
Corporation in the Ontario Superior Court of Justice, Court File No.:
292270188 seeking damages resulting from Union Carbide's breach of
environmental representations and warranties under the Amended and Restated
Purchase and Sale Agreement, dated January 31, 1986 (Agreement). Pursuant to
the Agreement, Viskase Corporation and various affiliates (including Viskase
Canada) purchased from Union Carbide and Union Carbide Films Packaging, Inc.,
its cellulosic casings business and plastic barrier films business
(Business), which purchase included a facility in Lindsay, Ontario, Canada
(Site). Viskase Canada is claiming that Union Carbide breached several
representations and warranties and deliberately failed to disclose to Viskase
Canada the existence of contamination on the Site.

In October 2001, the Canadian Ministry of the Environment (MOE) notified
Viskase Canada that it had evidence to suggest that the Site was a source of
polychlorinated biphenyl (PCB) contamination. Viskase Canada is working with
the MOE in investigating the alleged PCB contamination and developing and
implementing, if appropriate, a remedial plan for the Site. Viskase Canada
has been advised by the MOE that the MOE expects to issue certain Director's
Orders requiring remediation under applicable environmental legislation
against Viskase Canada and others in the next few months. Viskase Canada has
been granted leave to amend its lawsuit against Union Carbide to allege that
any PCB contamination at or around the Site was generated from Union
Carbide's plastics extrusion business, which was operated at the Site by
Union Carbide prior to the purchase of the Business. Union Carbide's plastics
extrusion business was not part of the Business purchased by Viskase
Corporation and its affiliates. Viskase Canada expects to amend the lawsuit
prior to June 1, 2003. Viskase Canada will be asking the court to require
Union Carbide to repurchase the Site from Viskase Canada and award Viskase
Canada damages in excess of $2.0 million (Canadian). The Company has reserved
$.5 million (U.S.) for the property remediation. The lawsuit is still pending
and is expected to proceed to trial sometime during the second half of 2004.

In August 2001, the Department of Revenue of the Province of Quebec, Canada
issued an assessment against Viskase Canada in the amount of $2,669,501.48
(Canadian) plus interest and possible penalties. This assessment is based
upon Viskase Canada's failure to collect and remit sales tax during the
period July 1, 1997 to May 31, 2001. During this period Viskase Canada did
not collect and remit sales tax in Quebec on reliance of the written advice
of its outside accounting firm. Viskase Canada filed a Notice of Objection in
November 2001 with supplementary submission in October 2002. No decision has
been made on the Notice of Objection. The ultimate liability for the Quebec
sales tax lies with the customers of Viskase Canada during the relevant
period. The Company has, however, provided for a reserve of $.3 million
(U.S.) for interest and penalties, if any. Viskase Canada is negotiating with
the Quebec Department of Ministry to avoid having to collect the sales tax
from customers who will then be entitled to credit for such sales tax
collected.

In March 1997, Viskase received a subpoena from the Antitrust Division of the
United States Department of Justice (DOJ) relating to a grand jury
investigation of the sausage casings industry. In September 1999, Viskase
received a subpoena from the DOJ relating to the expansion of the grand jury
investigation into the specialty plastic films industry. During October 2002,
Viskase was advised by the DOJ that it has closed the investigation of the
sausage casings and specialty plastic films industries and that no action
will be taken.

During 1999 and 2000, the Company and certain of its subsidiaries and one
other sausage casings manufacturer were named in ten virtually identical
civil complaints filed in the United States District Court for the District
of New Jersey by the following plaintiffs: Smith Provision Co., Inc.; Parks
LLC (d/b/a Parks Sausage Company); Real Kosher Sausage Company, Inc.; Sahlen
Packing Co., Inc.; Marathon Enterprises, Inc.; Ventures East, Inc.;
Keniston's, Inc.; Smithfield Foods, Inc.; Clougherty Packing Co.;
<PAGE>
and Klement Sausage Co. The District Circuit ordered all of these cases
consolidated in Civil Action No. 99-5195-MLC (D.N.J.). Each complaint brought
on behalf of a purported class of sausage casings customers alleges that the
defendants unlawfully conspired to fix prices and allocate business in the
sausage casings industry. In 2001, all of the consolidated cases were
transferred to the United States District Court for the Northern District of
Illinois, Eastern Division. The Company strongly denies the allegations set
forth in these complaints and intends to vigorously defend these claims.

In February 2003, the plaintiffs (other than Marathon Enterprises, Inc. which
has elected not to pursue its lawsuit against the Company) amended their
complaint to eliminate any claim against the Company that arose prior to
December 17, 1993. In March 2003, the Company filed a Motion to Dismiss the
amended complaint.

The Company and its subsidiaries are involved in these and various other
legal proceedings arising out of their business and other environmental
matters, none of which is expected to have a material adverse effect upon
results of operations, cash flows or financial condition.

Contractual Obligations Related to Debt, Leases and Related Risk Disclosure
(in thousands)
<TABLE>
<CAPTION>
2002                                                                        Expected Maturity Date
                                                        ---------------------------------------------------------------
                                        Current
                                      Liabilities
                                       Subject to                                                     There-
                                       Compromise       2003        2004        2005        2006      after      Total
-----------------------------------------------------------------------------------------------------------------------
<S>                                  <C>           <C>         <C>         <C>           <C>      <C>       <C>
                 Long-term debt,
      including current portion:

      Fixed interest rate ($000)        $163,060                                                        $85    $163,145
                   Interest rate          10.25%                                                         0%      10.25%

Accrued interest on Senior Notes         $25,098                                                                $25,098

    Capital lease obligations(1)                      $19,483     $21,300     $23,500                           $64,283
                Operating leases                       $1,425      $1,253      $1,097       $997     $3,503      $8,275
        Third party license fees                         $865        $400        $250       $200       $450      $2,165
            Employment agreement                       $2,109                                                    $2,109
</TABLE>
(1)  Capital lease obligations relate primarily to GECC Capitalized Lease
     Obligations classified as current in the financial statements. GECC
     lease payment maturities conform to contractual payments under the
     lease.

Other

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 143, "Accounting for
Asset Retirement Obligations." The statement applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development and (or) the normal operation of a
long-lived asset, except for certain obligations of lessees. The provisions
of this statement are required to be applied for fiscal years beginning after
June 15, 2002. The Company is considering the Standard and its effect on the
Company's financial statements.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." The statement is applicable for fiscal years beginning after
May 15, 2002 and requires, among other things, that any gain or loss on
extinguishment of debt that does not meet criteria in Opinion 30, as amended,
no longer be classified as an extraordinary item. The gain of $8.1 million,
net of income taxes, relating to the repurchase of Senior Notes in 2001 and
the gain of $6.5 million, net of income taxes, relating to the repurchase of
Senior Notes in 2000, were reported as extraordinary items in the Company's
consolidated statements of operations for
<PAGE>
the years then ended. In 2003, these prior period extraordinary items will be
reclassified in the consolidated statements of operations as a separate
caption along with interest expense in accordance with this statement.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." The statement requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
This statement replaces previous accounting guidance provided by Emerging
Issues Task Force (EITF) Issue No. 94-3. Statement 146 is to be applied
prospectively to exit or disposal activities initiated after December 31,
2002. The provisions of this Statement will prospectively apply to exit or
disposal activities initiated after December 31, 2002.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure." This statement amends SFAS No.
123, "Accounting for Stock-Based Compensation," to provide alternative
methods of transition for a voluntary change to fair value based method of
accounting for stock-based employee compensation and amends the disclosure
requirements to require prominent disclosure in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. The
provisions of this statement are effective for financial statements for
fiscal years ending after December 15, 2002. Management has adopted the
footnote disclosure provisions (see Note 2 to the consolidated financial
statements) and is considering the recognition provisions of the standard and
its effects on the Company's financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others." The interpretation elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
It also clarifies that a guarantor is required to recognize, at the inception
of a guarantee, a liability for the fair value of the obligation undertaken
in issuing the guarantee. The provisions of this interpretation are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The disclosure requirements are effective for financial
statements of interim or annual periods ending after December 15, 2002. The
Company will apply the provisions of this interpretation to guarantees issued
after December 31, 2002. The Company is in compliance with the disclosure
requirements of the interpretation.

Forward-looking Statements

Forward-looking statements in this report are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are not guarantees of future performance and
are subject to risks and uncertainties that could cause actual results and
Company plans and objectives to differ materially from those projected. Such
risks and uncertainties include, but are not limited to, general business and
economic conditions; competitive pricing pressures for the Company's
products; changes in other costs; opportunities that may be presented to and
pursued by the Company; determinations by regulatory and governmental
authorities; the ability to achieve other cost reductions and efficiencies;
and the effect of negotiations with the Company's creditors and the
restructuring of the Company's indebtedness.

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to certain market risks related to foreign currency
exchange rates. In order to manage the risk associated with this exposure to
such fluctuations, the Company occasionally uses derivative financial
instruments. The Company does not enter into derivatives for trading
purposes.

The Company also prepared sensitivity analyses to determine the impact of a
hypothetical 10% devaluation of the U.S. dollar relative to the European
receivables and payables denominated in U.S. dollars. Based on its
sensitivity analyses at December 31, 2002, a 10% devaluation of the U.S.
dollar would affect the Company's consolidated financial position by
approximately $44 thousand.

<PAGE>
The Company purchases gas futures contracts to lock in set rates on gas
purchases. The Company uses this strategy to minimize its exposure to
volatility in natural gas. These products are not linked to specific assets
and liabilities that appear on the balance sheet or to a forecasted
transaction and, therefore, do not qualify for hedge accounting. As such, the
loss on the change in fair value of the futures contracts was recorded in
other income and is immaterial.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial statements and supplementary financial information meeting the
requirements of Regulation S-X are listed in the index to financial
statements and schedules, as included under Part IV, Item 15 of this report.

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

There were no disagreements on accounting and financial disclosure required
to be disclosed under this Item.

<PAGE>
                                   PART III

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following sets forth the name, age and positions, of the Company's
officers and directors. Also set forth below is information as to the
principal occupation and background for such persons.

Directors

Robert N. Dangremond, 60, has been a principal with Jay Alix & Associates, a
consulting and accounting firm specializing in corporate restructurings and
turnaround activities, since August 1989. Mr. Dangremond also serves as a
Director for the Furr's Restaurant Group. Mr. Dangremond has served as a
director of the Company since 1993. Mr. Dangremond will be resigning as a
director of the Company as of the Effective Date of the Plan.

F. Edward Gustafson, 61, has been Chairman of the Board, President and Chief
Executive Officer of the Company since March 1996 and a director of the
Company since December 1993. Mr. Gustafson has been President and Chief
Executive Officer of Viskase Corporation since June 1998, and previously from
February 1990 to August 1994. From May 1989 to March 1996, Mr. Gustafson
served as Executive Vice President and Chief Operating Officer of the
Company. Mr. Gustafson has also served as Executive Vice President and Chief
Operating Officer of D.P. Kelly and Associates, L.P. (DPK) since November
1988.

Gregory R. Page, 51, has been President and Chief Operating Officer of
Cargill, Inc. ("Cargill"), a multinational trader and processor of foodstuffs
and other commodities, since June 2000. From May 1998 to June 2000, Mr. Page
served as Corporate Vice President and Section President of Cargill. From
August 1995 to May 1998, Mr. Page served as President of the Red Meat Group
of Cargill. Mr. Page has served as a director of the Company since 1993. Mr.
Page will be resigning as a director of the Company as of the Effective Date
of the Plan.

Executive Officers

F. Edward Gustafson, 61, has been Chairman of the Board, President and Chief
Executive Officer of the Company since March 1996 and a director of the
Company since December 1993. Mr. Gustafson has been President and Chief
Executive Officer of Viskase Corporation since June 1998, and previously from
February 1990 to August 1994. From May 1989 to March 1996, Mr. Gustafson
served as Executive Vice President and Chief Operating Officer of the
Company. Mr. Gustafson has also served as Executive Vice President and Chief
Operating Officer of DPK since November 1988.

Gordon S. Donovan, 49, has been Chief Financial Officer of the Company since
January 1997, and Vice President and Chief Financial Officer of Viskase
Corporation since June 1998. Mr. Donovan has served as Treasurer and
Assistant Secretary of the Company since November 1989, and as Vice President
since May 1995.

Kimberly K. Duttlinger, 38, has been Vice President, Secretary and General
Counsel of the Company since April 2000. From August 1998 through April 2000,
Ms. Duttlinger served as Associate General Counsel of the Company. From May
1997 to August 1998, Ms. Duttlinger served as Corporate Counsel of the
Company.

Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the
Exchange Act requires the Company's executive officers and directors and
persons who own more than 10% of a registered class of the Company's equity
securities to file reports of their ownership thereof and changes in that
ownership with the Securities and Exchange Commission (SEC) and the National
Association of Securities Dealers, Inc. Executive officers, directors and
greater than 10% stockholders are required by SEC regulations to furnish the
Company with copies of all such reports they file.

<PAGE>
Based solely upon its review of copies of such forms received by it, or on
written representations from certain reporting persons that other filings
were required for such persons, the Company believes that, during the year
ended December 31, 2002, there were no individuals who failed to comply with
the applicable Section 16(a) filing requirements, except that Donald P.
Kelly, a greater than 10% stockholder inadvertently failed to timely file one
Form 4 reporting one transaction.

ITEM 11.     EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation of Executive Officers. The
Summary Compensation Table below provides certain summary information
concerning the compensation by the Company for fiscal years 2002, 2001 and
2000 for services rendered by the Company's Chief Executive Officer and each
of the other executive officers of the Company whose total annual salary and
bonus exceeded $100,000 in 2002.

                                     SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                               Restricted
                                                                 Other Annua     Stock
       Name and                            Salary      Bonus     Compensation   Award(s)     Options (1)     All Other
  Principal Position             Year       ($)         ($)           ($)          ($)           (#)       Compensation
-----------------------------------------------------------------------------------------------------------------------
<S>                           <C>      <C>         <C>         <C>            <C>         <C>             <C>
F. Edward Gustafson              2002     535,000     267,500     67,004 (2)       -               -         16,050 (3)
Chairman of the Board,           2001     513,000           -          -           -               -         24,745
President and Chief              2000     497,250     273,488     74,423         212 (4)     200,000 (5)     17,239
Executive Officer

Gordon S. Donovan                2002     186,060      74,052     10,989           -               -          6,496 (6)
Vice President, Chief            2001     178,728      14,012     10,663           -               -          7,855
Financial Officer, Treasurer     2000     169,965      66,626      9,835         212 (4)      22,000          5,621
and Assistant Secretary

Kimberly K. Duttlinger           2002     125,340      43,518      4,720           -               -          4,093 (7)
Vice President, Secretary,       2001     133,072       9,121      5,318           -               -          4,325
and General Counsel              2000     143,127      49,093      2,147         212 (4)      15,000          4,294

-------------------------------
</TABLE>
(1)  Under the terms of the Plan, stock options outstanding as of the
     Effective Date under the Plan would be canceled upon emergence from
     bankruptcy.
(2)  Includes $30,000 for automobile allowance and $20,084 for reimbursement
     of legal services.
(3)  Includes $660 paid for group life insurance, $8,175 contributed to the
     Viskase SAVE Plan and $7,215 contributed to the Viskase Companies, Inc.
     Parallel Non-Qualified Savings Plan (Non-Qualified Plan).
(4)  Grant of 75 restricted shares of Common Stock to each of Messrs.
     Gustafson and Donovan and Ms. Duttlinger under the Company's "Diamond
     Anniversary Grant." The shares would be converted to Warrants under the
     Plan, and are subject to forfeiture until October 27, 2003.
(5)  In 2000, Mr. Gustafson was granted a stock option to purchase up to
     200,000 shares of Common Stock depending on the financial performance of
     the Company based on earnings before interest, taxes, depreciation, and
     amortization (EBITDA) for fiscal year 2000. Based on the Company's
     EBITDA for fiscal year 2000, a portion (i.e., 50,000 shares of Common
     Stock, which would be canceled under the Plan) of this stock option was
     earned.
(6)  Includes $494 paid for group life insurance, $5,582 contributed to the
     Viskase SAVE Plan and $420 contributed to the Non-Qualified Plan.
(7)  Includes $333 paid for group life insurance and $3,760 contributed to
     the Viskase SAVE Plan.

Stock Option Exercises and Holdings. The following table provides information
concerning the exercise of stock options for Common Stock during the fiscal
year ended December 31, 2002 and the fiscal year-end value of stock options
for Common Stock with respect to each of the persons named in the Summary
Compensation Table. Pursuant to the Plan, all stock options outstanding as of
the Effective Date under the Plan would be canceled.

<PAGE>
  Aggregated Option/SAR Exercises in 2002 and December 31, 2002 Option Values

<TABLE>
<CAPTION>
                                                               Number of
                                                               Securities       $ Value of
                                                               Underlying       Unexercised
                                                              Unexercised      In-the-Money
                                   Shares                      Options at       Options at
                                  Acquired        Value         12/31/02         12/31/02
                                on Exercise     Realized      Exercisable/      Exercisable/
Name                                (#)            ($)       Unexercisable     Unexercisable
--------------------------------------------------------------------------------------------
<S>                           <C>             <C>         <C>                 <C>
F. Edward Gustafson........          --             --         170,000 / 0          0 / 0
Gordon S. Donovan..........          --             --          79,000 / 0          0 / 0
Kimberly K. Duttlinger.....          --             --          40,000 / 0          0 / 0
</TABLE>

Restricted Stock Plan. Upon the emergence from bankruptcy under chapter 11 of
the Bankruptcy Code, Mr. Donovan and Ms. Duttlinger would be granted 37,500
and 10,000 restricted shares, respectively, of New Common Stock under the
Restricted Stock Plan. Based upon the number of shares of Common Stock held
in their 401(k) accounts, Mr. Donovan and Ms. Duttlinger would also be
granted an additional 8,105 and 153 restricted shares of New Common Stock,
respectively, under the Restricted Stock Plan.

Restricted stock grants issued under the Restricted Stock Plan would vest 12-
1/2% on the date of the grant, 17-1/2% on the first anniversary of the grant,
20% on the second anniversary of the grant, 20% on the third anniversary of
the grant, and 30% on the fourth anniversary of the grant, subject to
acceleration under certain defined events.

Equity Compensation Plan Information Table. The following table provides
information as of December 31, 2002 regarding the number of shares of the
Company's Common Stock that may be issued under the Company's equity
compensation plans.

<TABLE>
<CAPTION>
                                                                      (a)                 (b)                  (c)
                                                                                                           Number of
                                                                                                          securities
                                                                                                          remaining
                                                                                                        available for
                                                                                                       future issuance
                                                                   Number of                            under equity
                                                               securities to be        Weighted          compensation
                                                                  issued upon      average exercise     plans excluding
                                                                  exercise of         price of           securities
                                                                  outstanding        outstanding        reflected in
Plan Category                                                       options            options           column (a)
-----------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                  <C>              <C>
Equity compensation plans approved by security holders              835,430             $2.71             449,898
Equity compensation plans not approved by security holders               --                --                  --
                                                                    -------             -----             -------
Total                                                               835,430             $2.71             449,898
                                                                    =======             =====             =======
</TABLE>
These options will be canceled under terms of the Plan on the Emergence Date.

<PAGE>
Pension Plan Table. The following table sets forth estimated annual benefits
payable upon retirement under the Retirement Program for Employees of Viskase
Corporation (the "Retirement Program") to employees of the Company and its
wholly owned subsidiary, Viskase Corporation, in specified remuneration and
years of service classifications.

                              Pension Plan Table
<TABLE>
<CAPTION>
Assumed Final Average             Annual Benefits for Years of Service Indicated (2)
Annual Salary (1)
                          15               20               25               30               35
---------------------  -------         --------          --------        ---------        --------
<S>                 <C>              <C>              <C>              <C>              <C>
     $100,000          $18,000          $24,000          $30,000          $36,000          $42,000
      150,000           27,000           36,000           45,000           54,000           63,000
      200,000           36,000           48,000           60,000           72,000           84,000
      250,000           45,000           60,000           75,000           90,000          105,000
      300,000           54,000           72,000           90,000          108,000          126,000
      350,000           63,000           84,000          105,000          126,000          147,000
      400,000           72,000           96,000          120,000          144,000          168,000
      450,000           81,000          108,000          135,000          162,000          189,000
      500,000           90,000          120,000          150,000          180,000          210,000
      550,000           99,000          132,000          165,000          198,000          231,000
</TABLE>

(1)  Annual benefits payable under the Retirement Program are calculated
     based on the participant's average base salary for the consecutive
     thirty-six (36) month period immediately prior to retirement.

(2)  The annual benefits payable are based on straight-life annuity basis at
     normal retirement age. The benefits reported in this table are not
     subject to any reduction for benefits paid by other sources, including
     Social Security. As of December 31, 2002, Messrs. Gustafson and Donovan
     and Ms. Duttlinger are credited with 13, 15 and 6 years of service,
     respectively.

Compensation of Directors. Each director who is not an officer of the Company
received an annual retainer of $20,000 in 2002 and a fee of $4,000 for each
attended meeting of the Board of Directors. Chairmen of committees (other
than the Interested Person Transaction Committee) of the Board of Directors
received an annual retainer of $1,500 in 2002. Directors also received a fee
for each attended meeting of a committee of the Board of Directors (other
than the Interested Person Transaction Committee) of $1,000 ($500 in the case
of committee meetings occurring immediately before or after meetings of the
full Board of Directors). Members of the Interested Person Transaction
Committee did not receive a fee in 2002. Directors who are officers of the
Company do not receive compensation in their capacity as directors. Pursuant
to Viskase Companies, Inc. 1993 Stock Option Plan, as amended, on the date of
each annual meeting of stockholders, non-employee directors are granted a
stock option to purchase 1,000 shares of Common Stock at an option exercise
price equal to the fair market value of the Common Stock the date of grant.
The Company did not hold an annual meeting of stockholders during 2002.
Pursuant to the Non-Employee Directors' Compensation Plan, non-employee
directors may elect to receive their director fees in the form of shares of
Common Stock. The number of shares received is based on the average of the
closing bid and ask price of the Common Stock on the business day preceding
the date the Common Stock is issued. None of the directors currently receive
their fees in the form of Common Stock.

Compensation Committee Interlocks and Insider Participation. During 2002, the
Compensation and Nominating Committee of the Board of Directors consisted of
Messrs. Robert N. Dangremond and Gregory R. Page, each of whom is a non-
employee director of the Company and will be resigning as a director as of
the Effective Date of the Plan. Mr. Page is the President and Chief Operating
Officer of Cargill, Inc. During 2002, Viskase Corporation, a wholly owned
subsidiary of the Company, had sales of $592,000 made in the ordinary course
to Cargill, Inc. and its affiliates.

<PAGE>
Employment Agreements and Change-in-Control Arrangements

Employment Agreements with F. Edward Gustafson. On March 27, 1996, the
Company entered into an Employment Agreement with Mr. F. Edward Gustafson.
The Employment Agreement was amended and restated during 1997, amended twice
during 2001 and once during 2002 (the "Employment Agreement"). Pursuant to
the Employment Agreement, Mr. Gustafson has agreed to serve as Chairman of
the Board, President and Chief Executive Officer of the Company, and the
Company has agreed to use its best efforts to cause Mr. Gustafson to be
elected as a director of the Company, during the term of the Agreement. The
initial term of the Employment Agreement is three (3) years, provided,
however, that on March 26, 1997 and each subsequent anniversary thereof, the
term of the Employment Agreement will be automatically extended for a period
of one (1) year unless the Company or Mr. Gustafson gives written notice to
the other at least thirty (30) days prior to the anniversary date that the
term shall not be so extended.

Under the Employment Agreement, Mr. Gustafson receives an annual base salary
of $535,000 and $30,000 per year in lieu of a Company-provided automobile.
Mr. Gustafson's base salary will be increased by the Board of Directors each
year in a manner consistent with increases in base salary for other senior
officers of the Company. In addition, the Employment Agreement provides that
Mr. Gustafson would be eligible to receive a bonus based on a percentage of
his base salary depending on the Company's performance based on EBITDA. Mr.
Gustafson will be eligible to receive an annual bonus for future fiscal years
of the Company based on such financial performance or other performance-
related criteria as established by the Board of Directors after consultation
with Mr. Gustafson. For information concerning actual bonuses earned by Mr.
Gustafson, see the "Summary Compensation Table." Mr. Gustafson is also
entitled to participate in any employee benefit plans in effect for, and to
receive other fringe benefits provided to, other executive officers.

Pursuant to and upon execution of the Employment Agreement, Mr. Gustafson was
granted two (2) stock options, each to purchase 35,000 shares of Common
Stock. One (1) stock option is exercisable in cumulative annual increments of
one-third commencing on the first anniversary of the date of grant. The other
stock option is exercisable in cumulative annual increments of one-third
commencing on the second anniversary of the date of grant. In addition, Mr.
Gustafson was granted a third stock option to purchase up to 75,000 shares of
Common Stock dependent on the Company's financial performance for fiscal year
1996. The Company did not meet the financial performance targets and,
therefore, no portion of this stock option became exercisable or will become
exercisable in the future. Lastly, Mr. Gustafson was granted 35,000
restricted shares of Common Stock that could not be transferred, and were
subject to forfeiture, until March 27, 1999.

If Mr. Gustafson's employment is terminated by the Company for Cause, as
defined in the Employment Agreement, or by Mr. Gustafson other than for Good
Reason or Disability, as defined in the Employment Agreement, Mr. Gustafson
will be paid all Accrued Compensation, as defined in the Employment
Agreement, through the date of termination of employment. If Mr. Gustafson's
employment with the Company is terminated by the Company for any reason other
than for Cause, death or Disability, or by Mr. Gustafson for Good Reason, (i)
Mr. Gustafson will be paid all Accrued Compensation plus 300% of his base
salary (or 200% in the event that DPK, or a company in which DPK has a
substantial interest, is the beneficial owner of the Company following a
Change of Control) and the prorated amount of annual bonus that would have
been payable to Mr. Gustafson with respect to the fiscal year in which Mr.
Gustafson's employment is terminated, provided that the performance targets
have been actually achieved as of the date of termination (unless such
termination of employment follows a Change in Control, as defined in the
Agreement, in which case Mr. Gustafson will receive a bonus equal to 50% of
his base salary regardless of the Company's performance) ("Termination
Compensation"), (ii) Mr. Gustafson will continue to receive life insurance,
medical, dental and hospitalization benefits for a period of twenty-four (24)
months following termination of employment, and (iii) all outstanding stock
options and restricted shares of Common Stock will become immediately
exercisable, vested and nonforfeitable. Under the Employment Agreement, with
respect to any Change in Control that occurred prior to November 1, 2001, Mr.
Gustafson has until thirty (30) days following the earlier to occur of (i)
the date on which the Company has provided written notice of acceptance to
the exchange offer agent with respect to
<PAGE>
the Exchange Offer (as defined in Amendment Number Three to the Employment
Agreement); (ii) the effective date of the Plan (as defined in Amendment
Number Three to the Employment Agreement) of the Company and Viskase
Corporation under chapter 11 of the United States Bankruptcy Code or the date
on which the Company's and Viskase Corporation's bankruptcy is converted from
a chapter 11 proceeding to a chapter 7 proceeding; or (iii) the closing date
contained in any agreement related to the sale of substantially all of the
assets of the Company and/or Viskase Corporation or the sale or other
issuance of at least a majority of the stock of the Company or Viskase
Corporation, to provide notice that he intends to terminate his employment
for Good Reason because of such Change in Control. With respect to any Change
in Control occurring after November 1, 2001, Mr. Gustafson has one year after
such Change in Control to terminate his Employment Agreement for Good Reason
based upon such Change in Control. During 2002, the Company and Viskase
Corporation entered into a Letter of Credit Agreement with Mr. Gustafson that
requires the Company and Viskase Corporation to secure and maintain a standby
letter of credit in amount equal to the Accrued Compensation and Termination
Compensation.

Pursuant to the Employment Agreement, Mr. Gustafson is generally prohibited
during the term of the Agreement, and for a period of two (2) years
thereafter, from competing with the Company, soliciting any customer of the
Company or inducing or attempting to persuade any employee of the Company to
terminate his or her employment with the Company in order to enter into
competitive employment. For purposes of the Employment Agreement, the Company
includes Viskase Companies, Inc. and any of its subsidiaries over which Mr.
Gustafson exercised, directly or indirectly, any supervisory, management,
fiscal or operating control during the term of the Employment Agreement.

On August 30, 2001, Viskase Corporation entered into an employment agreement
with Mr. Gustafson ("Viskase Employment Agreement"). The Viskase Employment
Agreement was amended once during 2001 and once during 2002. The Viskase
Employment Agreement is substantially similar to the Employment Agreement.
Any benefits received by Mr. Gustafson under either employment agreement
would be credited against benefits payable under the other employment
agreement.

Employment Agreements with Gordon S. Donovan and Kimberly K. Duttlinger. On
November 29, 2001, the Company and Viskase entered into employment agreements
with Mr. Donovan and Ms. Duttlinger ("Executive Employment Agreements").
Pursuant to the Executive Employment Agreement, Mr. Donovan has agreed to
serve as Vice President, Chief Financial Officer and Treasurer of the Company
and Viskase Corporation and Ms. Duttlinger has agreed to serve as Vice
President, Secretary and General Counsel of the Company and Viskase
Corporation, during the term of the Executive Employment Agreements. The
initial term of the Executive Employment Agreements is approximately three
(3) years ending December 31, 2004, provided, however, that on January 1,
2003 and each subsequent anniversary thereof, the term of the Executive
Employment Agreements will be automatically extended for a period of one (1)
year unless the Company or Mr. Donovan or Ms. Duttlinger gives written notice
to the other at least thirty (30) days prior to the anniversary date that the
term shall not be so extended.

Under the Executive Employment Agreements, Mr. Donovan and Ms. Duttlinger
receive an annual base salary of at least $193,020 and $129,840,
respectively. Mr. Donovan's and Ms. Duttlinger's base salary will be
increased by the President of the Company each year in a manner consistent
with increases in base salary for other senior officers of the Company. In
addition, the Executive Employment Agreements provide that Mr. Donovan and
Ms. Duttlinger are eligible to participate in the (i) Management Incentive
Plan, a bonus program calculated as a percentage of his/her base salary
depending on the Company's performance based on EBITDA and his/her personal
performance; (ii) Non-Qualified Parallel Plan; (iii) Executive Auto Allowance
Program; and (iv) 1993 Stock Option Plan and any replacement thereof. Mr.
Donovan and Ms. Duttlinger are also entitled to participate in any employee
benefit plans in effect for, and to receive other fringe benefits provided
to, other executive officers.

<PAGE>
If Mr. Donovan's or Ms. Duttlinger's employment is terminated by the Company
for Cause, as defined in the Executive Employment Agreements, or by Mr.
Donovan or Ms. Duttlinger other than for Good Reason or Disability, as
defined in the Executive Employment Agreements, Mr. Donovan or Ms. Duttlinger
will be paid all Accrued Compensation, as defined in the Employment
Agreement, through the date of termination of employment. If Mr. Donovan's or
Ms. Duttlinger's employment with the Company is terminated by the Company for
any reason other than for Cause, death or Disability, or by Mr. Donovan or
Ms. Duttlinger for Good Reason, (i) Mr. Donovan or Ms. Duttlinger will be
paid all Accrued Compensation plus 200% of his/her base salary and the
prorated amount of annual bonus that would have been payable to Mr. Donovan
or Ms. Duttlinger with respect to the fiscal year in which his/her employment
is terminated, provided that the performance targets have been actually
achieved as of the date of termination (unless such termination of employment
follows a Change in Control, as defined in the Agreement, in which case Mr.
Donovan will receive a bonus equal to 40% of his base salary regardless of
the Company's performance and Ms. Duttlinger will receive a bonus equal to
35% of her base salary regardless of the Company's performance), (ii) Mr.
Donovan and Ms. Duttlinger will continue to receive life insurance, medical,
dental and hospitalization benefits for a period of twenty-four (24) months
following termination of employment, and (iii) all outstanding stock options
and restricted shares will become immediately exercisable, vested and
nonforfeitable.

Pursuant to the Executive Employment Agreements, Mr. Donovan and Ms.
Duttlinger are generally prohibited during the term of their respective
Agreements, and for a period of two (2) years thereafter, from competing with
the Company, soliciting any customer of the Company or inducing or attempting
to persuade any employee of the Company to terminate his or her employment
with the Company in order to enter into competitive employment. For purposes
of the Executive Employment Agreements, the Company includes Viskase
Companies, Inc. and any of its subsidiaries over which Mr. Donovan or Ms.
Duttlinger exercised, directly or indirectly, any supervisory, management,
fiscal or operating control during the term of the Executive Employment
Agreements.

<PAGE>
ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the beneficial ownership of Common Stock as of
March 28, 2003 of (a) each person or group of persons known to the Company to
beneficially own more than 5% of the outstanding shares of Common Stock, (b)
each director and nominee for director of the Company, (c) each executive
officer of the Company listed in the Summary Compensation Table above, and
(d) all executive officers and directors of the Company as a group. All
information is taken from or based upon ownership filings made by such
persons with the Securities and Exchange Commission or upon information
provided by such persons to the Company.

<TABLE>
<CAPTION>
Name and Address of                                  Number of Shares                Percent
Beneficial Owner                                  Beneficially Owned (1)           of Class (1)
--------------------                              ----------------------           ------------
<S>                                           <C>                              <C>
Pacificor, Inc.                                         5,000,000                     32.65%
1575 N. Ontare Road
Santa Barbara, CA 93105

Steven L. Gevirtz                                       3,495,652 (2)                 22.83%
Katana Fund LLC
Katana Capital Advisors LLC
1859 San Leandro Lane
Santa Barbara, California 93108

F. Edward Gustafson                                     1,979,610 (3)(4)(5)           12.78%
625 Willowbrook Centre Parkway
Willowbrook, Illinois 60527

Donald P. Kelly                                         1,570,287 (3)                 10.25%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523

Volk Enterprises, Inc.                                  1,300,000                      8.49%
618 S. Kilroy
Turlock, California 95380

Robert N. Dangremond                                       64,340 (6)                      *
Gordon S. Donovan                                         108,208 (5)(7)                   *
Kimberly K. Duttlinger                                     40,306 (8)                      *
Gregory R. Page                                            34,150 (6)                      *

All directors and executive officers of the
Company as a group (5 persons)                          2,226,614 (9)                 14.26%

--------------------------------
*  Less than 1%.
</TABLE>

(1)  Beneficial ownership is calculated in accordance with Section 13(d) of
     the Securities Exchange Act of 1934 and the rules promulgated
     thereunder. Accordingly, the "Number of Shares Beneficially Owned" and
     the "Percent of Class" shown for each person listed in the table are
     based on the assumption that stock options which are exercisable
     currently or within 60 days of March 30, 2003, held by such person, have
     been exercised. Unless otherwise indicated, the persons listed in the
     table have sole voting and investment power over those securities listed
     for such person.

(2)  Katana Capital Advisors, LLC manages the Katana Fund LLC and therefore
     is deemed to indirectly own the shares owned by the Katana Fund LLC.

<PAGE>
(3)  The ownership indicated includes 70,287 shares owned by DPK, of which
     Mr. Kelly and Mr. Gustafson are principals and officers. The general
     partner of DPK is C&G Management Company, Inc. ("C&G Management"), which
     is owned by Mr. Kelly and Mr. Gustafson. The ownership indicated also
     includes 1,300,000 shares owned by Volk Enterprises, Inc. ("Volk"). Volk
     is controlled by Volk Holdings L.P., whose general partner is Wexford
     Partners I L.P. ("Wexford Partners"). The general partner of Wexford
     Partners is Wexford Corporation, which is owned by Mr. Kelly and Mr.
     Gustafson. Mr. Kelly and Mr. Gustafson share voting and investment power
     over the shares owned by DPK and Volk. However, Mr. Kelly and Mr.
     Gustafson each disclaim beneficial ownership of shares owned by DPK and
     Volk except to the extent of their respective pecuniary interest in such
     entities.

(4)  The ownership indicated includes 170,000 shares subject to stock options
     owned by Mr. Gustafson. The ownership indicated also includes 70,619
     shares owned by Mr. Gustafson's spouse. Mr. Gustafson does not have or
     share voting or investment power over the shares owned by his spouse and
     disclaims beneficial ownership of such shares.

(5)  The ownership indicated also includes 218,000 and 2,998 shares acquired
     by Messrs. Gustafson and Donovan, respectively, pursuant to the Non-
     Qualified Plan.

(6)  The ownership indicated includes 7,000 shares subject to stock options
     owned by each of Messrs. Dangremond and Page.

(7)  The ownership indicated includes 79,000 shares subject to stock options
     owned by Mr. Donovan, 8,000 shares held by Mr. Donovan as trustee for
     the benefit of his spouse, with whom Mr. Donovan shares voting and
     investment power over such shares and 1,000 shares owned by Mr.
     Donovan's spouse. Mr. Donovan does not have or share voting power over
     the 1,000 shares owned by his spouse. Mr. Donovan disclaims beneficial
     ownership of the shares held by him as trustee and the shares owned by
     his spouse.

(8)  The ownership indicated includes 40,000 shares subject to stock option
     owned by Ms. Duttlinger.

(9)  See Footnotes (3), (4), (5), (6), (7) and (8).

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During 2002, the Company purchased product in the ordinary course of business
and on arm's-length terms from affiliates of Mr. Gustafson, Chairman of the
Board, President and Chief Executive Officer of the Company, including Volk,
in the amount of $321.

During 2002, Viskase had sales of $592 to Cargill, Inc. and its affiliates.
Such sales were made in the ordinary course of the business. Gregory R. Page,
President and Chief Operating Officer of Cargill, Inc., became a director of
the Company in 1993 and is currently serving in that capacity. Mr. Page will
be resigning as a director as of the Effective Date.

ITEM 14.     CONTROLS AND PROCEDURES

CEO and CFO Certifications

This annual report contains two separate forms of certifications of the Chief
Executive Officer (CEO) and Chief Financial Officer (CFO). The first form of
certification, appearing immediately following the Signatures section of this
annual report is required by SEC rules promulgated pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (302 Certifications). In the 302
Certifications, there are several certifications made by the CEO and CFO
relating to the Company's disclosure controls and procedures and internal
controls. This section of this annual report should be read in conjunction
with the 302
<PAGE>
Certifications relating to the Company's disclosure controls and
procedures and the Company's internal controls.

Evaluation of Disclosure Controls and Procedures

Within 90 days prior to the filing of this annual report (Evaluation Date),
the Company's management, under the supervision and with the participation of
the CEO and the CFO, evaluated the effectiveness of the design and operation
of the Company's disclosure controls and procedures.

Disclosure controls are procedures that are designed with the objective of
ensuring that information required to be disclosed in the Company's reports
filed under the Exchange Act, such as this annual report, is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms. Disclosure controls are also designed with the
objective of ensuring that such information is accumulated and communicated
to the Company's management, including the CEO and CFO, as appropriate to
allow timely decisions regarding required disclosure.

Based upon the evaluation by the CEO and CFO, the Company's disclosure
controls and procedures are effective in ensuring that all material
information required to be filed in this annual report has been made known to
them in a timely fashion.

Evaluation of Internal Controls

The Company's management also evaluated the effectiveness of the Company's
internal controls. Internal controls are procedures which are designed with
the objective of providing reasonable assurance that (1) the Company's
transactions are properly authorized; (2) the Company's assets are
safeguarded against unauthorized or improper use; and (3) the Company's
transactions are properly recorded and reported, all to permit the
preparation of our financial statements in conformity with generally accepted
accounting principles.

In accord with SEC requirements, the CEO and CFO note that, since the
Evaluation Date, there have been no significant changes in the Company's
internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Limitations on the Effectiveness of Controls

A control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. The design of a control system will be subject to various
limitations, such as resource constraints, expertise of personnel and cost-
benefit constraints. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of
simple error or mistake. Additionally, controls can be circumvented by the
individual acts of some persons, by collusion of two or more people, or by
management override of the controls. The design of any system of controls
also is based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions. Because of
the inherent limitations in a cost-effective control system, misstatements
due to error or fraud may occur and not be detected.

<PAGE>
                                      PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)1.   Financial statements:                                           PAGE

        Report of independent accountants                               F-2

        Consolidated balance sheets, December 31, 2002 and 2001         F-3

        Consolidated statements of operations, for the years ended
             December 31, 2002, 2001 and 2000                           F-4

        Consolidated statements of stockholders' deficit, for the years
             ended December 31, 2002, 2001 and 2000                     F-6

        Consolidated statements of cash flows, for the years ended
             December 31, 2002, 2001 and 2000                           F-7

        Notes to consolidated financial statements                      F-8

(a)2.   Financial statement schedules for the years ended
        December 31, 2002, 2001 and 2000:

        II   Valuation and qualifying accounts                          F-38

Schedules other than those listed are omitted because they are not required,
are not applicable, or because equivalent information has been included in
the financial statements and notes thereto or elsewhere herein.

(b)     Reports on Form 8-K.

        1.  On October 17, 2002, the Company announced that the Department of
            Justice had closed its investigation of the sausage casings and
            specialty plastic films industries.

        2.  On October 21, 2002, the Company announced extension of the
            expiration date of its exchange offer relating to its 10-1/4%
            Senior Notes until 5:00 p.m. on November 4, 2002.

        3.  On November 13, 2002, the Company announced expiration of
            exchange offer and filing of voluntary prepackaged bankruptcy
            petition.

        4.  On December 9, 2002, the Company announced breakthrough
            technology to control listeria in hot dogs and sausages.

        5.  On December 20, 2002, the Company announced confirmation of its
            prepackaged plan of reorganization.

        6.  On December 30, 2002, the Company amended its Rights Agreement,
            dated June 26, 1996, between the Company and Harris Trust and
            Savings Bank. Under the Rights Agreement, as amended, from the
            date of the amendment through April 19, 2003, all Rights
            outstanding (other than those held by a 41%-or-more stockholder
            and certain other specified persons) will automatically, without
            any further action of the Board of Directors, be exchanged for
            shares of Common Stock of the Company at an exchange rate of one
            share of Common Stock per Right simultaneous with any Person
            becoming a 41%-or-more stockholder.

<PAGE>
(c)     Exhibits:

Exhibit No.  Description of Exhibits                                     Page

     2.0     Purchase Agreement, dated July 7, 2000 among the
             Company and certain of its subsidiaries and Bemis
             Company, Inc. (incorporated herein by reference to
             Exhibit 2 to Form 8-K filed September 25, 2000).              *

     2.1     Amendment No. 1 to Purchase Agreement, dated
             August 31, 2000, among the Company and certain of its
             subsidiaries and Bemis Company, Inc. (incorporated herein
             by reference to Exhibit 2.1 of Form 10-Q for the fiscal
             quarter ended September 30, 2000 filed November 15, 2000).    *

     2.2     Amendment No. 2 to Purchase Agreement, dated
             May 18, 2001, among the Company and certain of its
             subsidiaries and Bemis Company, Inc.                         **

     2.3     Debtor's Prepackaged Plan of Reorganization as
             Modified, dated March 18, 2003.                              **

     3.1     Amended and Restated Certificate of Incorporation
             of the Company (incorporated herein by reference
             to Exhibit 3.1 to Form 8-K filed January 19, 1994).           *

     3.2     Certificate of Ownership and Merger of Viskase
             Companies, Inc. into Envirodyne Industries, Inc.              *

     3.3     Amended and Restated By-Laws of the Company
             (incorporated herein by reference to Exhibit 3.2
             to Form 8-K filed May 16, 1997).                              *

     4.1     Indenture, dated as of December 31, 1993, between
             the Company and Bankers Trust Company, as Trustee,
             relating to the 10-1/4% Notes Due 2001 of the
             Company including form of 10-1/4% Note Due 2001
             (incorporated herein by reference to Exhibit 4.1 to
             Form 8-K filed January 19, 1994).                             *

     4.3     Rights Agreement, dated as of June 26, 1996,
             between the Company and Harris Trust and Savings
             Bank, as Rights Agent (incorporated herein by
             reference to Exhibit 4.1 of Form 8-K dated
             June 26, 1996 filed June 28, 1996).                            *

    10.1     Participation Agreement, dated as of December 18, 1990,
             among Viskase Corporation, as Lessee, the Company,
             as Guarantor, General Electric Capital Corporation,
             as Owner Participant, and The Connecticut National
             Bank, as Owner Trustee (incorporated herein by
             reference to Exhibit 10.24 to Form 8-K filed
             January 22, 1991).                                            *

    10.2     Lease Agreement, dated as of December 18, 1990,
             between The Connecticut National Bank, Owner Trustee,
             as Lessor and Viskase Corporation, as Lessee
             (incorporated herein by reference to Exhibit 10.25
             to Form 8-K filed January 22, 1991).                          *

    10.3     Appendix A; Definitions relating to the Participation
             Agreement, the Lease and the Ground Lease (incorporated
             herein by reference to Exhibit 10.26 to Form 8-K filed
             January 22, 1991).                                            *


*     Previously filed by the Company, incorporated by reference.
**    Filed herewith.

<PAGE>
Exhibit No.  Description of Exhibits                                     Page

    10.4     Ground Lease, dated as of December 18, 1990,
             between Viskase Corporation, as Ground Lessor,
             and The Connecticut National Bank, as Ground
             Lessee (incorporated herein by reference to
             Exhibit 10.27 to Form 8-K filed January 22, 1991).            *

    10.5     Guaranty Agreement, dated as of December
             18, 1990, among the Company; Clear Shield
             National, Inc.; Sandusky Plastics of
             Delaware, Inc.; Viskase Sales Corporation,
             all as Guarantors; The Connecticut National
             Bank, as Owner Trustee; and General Electric
             Capital Corporation, as Owner Participant
             (incorporated herein by reference to Exhibit
             10.28 to Form 8-K filed January 22, 1991).                    *

    10.6     Trust Agreement, dated as of December 18, 1990,
             between General Electric Capital Corporation,
             as Owner Participant, and The Connecticut
             National Bank, as Owner Trustee (incorporated
             herein by reference to Exhibit 10.29 to
             Form 8-K, filed January 22, 1991, of
             Viskase Companies, Inc.).                                     *

    10.7     Non-Employee Directors' Compensation
             Plan (incorporated herein by reference to
             Appendix B of the Company's Proxy
             Statement for its 1996 Annual Meeting
             of Stockholders).+                                            *

    10.8     1993 Stock Option Plan, as amended and
             restated through March 27, 1996 (incorporated
             herein by reference to Appendix A of the
             Company's Proxy Statement for its 1996 Annual
             Meeting of Stockholders). +                                   *

    10.9     Viskase Companies, Inc. Parallel
             Non-Qualified Thrift Plan (incorporated
             herein by reference to Exhibit 10.35 to
             Form 10-Q for the fiscal quarter ended
             June 27, 1991 filed August 12, 1991). +                       *

   10.10     Amended and Restated Employment
             Agreement, effective March 27, 1996,
             between the Company and F. Edward Gustafson
             (incorporated herein by reference to
             Exhibit 10.20 to Form 10-Q for the fiscal
             quarter ended June 25, 1998 filed
             August 10, 1998). +                                           *

   10.11     Amendment to Viskase Companies, Inc. 1999
             Parallel Non-Qualified Savings Plan
             (incorporated herein by reference to
             Exhibit 4.5 to the Company's Registration
             Statement on Form S-8, #333-33508, filed
             on March 29, 2000). +                                         *

   10.12     Viskase Corporation Severance Pay
             Policy (incorporated herein by reference
             to Exhibit 10.34 to Form 10-K for the
             year ended December 31, 1999, filed
             September 22, 2000). +                                        *

   10.13     Agreement and Amendment dated as of
             April 13, 2000, between Viskase
             Corporation (the Lessee) and State
             Street Bank and Trust Company (the Lessor)
             as Owner Trustee under the Trust Agreement
             relating to the Lease Agreement dated as
             of December 18, 1990 (as amended and
             supplemented to the date hereof, between
             the Lessee and the Lessor, as successor
             trustee to Fleet National Bank formerly
             known as Shawmut Bank Connecticut,
             National Association, formerly known as
             The Connecticut National Bank (incorporated
             herein by reference to Exhibit 10.39 to
             Form 10Q for the fiscal quarter ended
             June 30, 2000 filed September 25, 2000).                     *

+     Management contract or compensatory plan or arrangement.
*     Previously filed by the Company, incorporated by reference.

<PAGE>
Exhibit No.  Description of Exhibits                                     Page

   10.14     Amendment No. 1 dated as of June 30, 2000,
             to the Letter Agreement and Amendment dated
             as of April 13, 2000, between Viskase
             Corporation and State Street Bank and
             Trust Company, as Owner Trustee under
             the Trust Agreement relating to the Lease
             Agreement dated as of December 18, 1990
             as amended and supplemented to the date
             hereof, (incorporated herein by reference
             to Exhibit 10.44 to Form 10Q for the fiscal
             quarter ended June 30, 2000 filed September
             25, 2000).                                                    *

   10.15     Agreement and Waiver dated as of March 22,
             2001 between Viskase Corporation (the Lessee)
             and State Street Bank and Trust Company (the
             Lessor) relating to Participation Agreement
             dated December 18, 1990 among Viskase
             Corporation, as Lessee, Viskase Companies,
             Inc. as Guarantor, General Electric Capital
             Corporation, as Owner Participant, and
             State Street Bank and Trust Company, as
             Owner Trustee, (incorporated herein by r
             eference to Exhibit 10.36 of Form 10-Q for
             the fiscal quarter ended March 31, 2001
             filed May 16, 2001).                                          *

   10.16     Master Letter of Credit Agreement dated
             June 29, 2001 between Viskase Corporation
             and LaSalle Bank National Association
             (incorporated herein by reference to
             Exhibit 10.37 of the Form 10-Q for the
             fiscal quarter ended June 30, 2001 filed
             August 15, 2001).                                             *

   10.17     Amendment No. 1 (the "Amendment") dated
             October 27, 2001 to the Rights Agreement
             dated June 26, 1996 (the "Agreement") between
             Envirodyne Industries, Inc., a Delaware
             corporation (now known as Viskase Companies,
             Inc. and Harris Trust Savings Bank, an
             Illinois banking corporation (the "Rights
             Agent") (incorporated herein by reference
             to Exhibit 4 to Form 8-K filed October 29, 2001).             *

   10.18     Agreement and waiver dated August 2, 2001
             between Viskase Corporation and State Street
             Bank and Trust Company as Owner Trustee,
             relating to Participation Agreement dated
             December 18, 1990 (incorporated herein by
             reference to Exhibit 10.38 to Form 10-Q
             for the fiscal quarter ended September 30,
             2001 filed November 14, 2001).                                *

   10.19     Amendment dated August 30, 2001 to the
             Amended and Restated Employment Agreement,
             effective March 27, 1996, between F. Edward
             Gustafson and Viskase Companies,
             Inc. (incorporated herein by reference
             to Exhibit 10.26 to Form 10-K for the fiscal
             year ended December 31, 2001).+                               *

   10.20     Employment Agreement dated August 30, 2001
             between Viskase Corporation and F. Edward
             Gustafson. (incorporated herein by reference
             to Exhibit 10.27 to Form 10-K for the fiscal
             year ended December 31, 2001).+                               *

   10.21     Amendment Number Two dated November 1, 2001
             to the Amended and Restated Employment Agreement,
             effective March 27, 1996 between F. Edward
             Gustafson and Viskase Companies, Inc.
             (incorporated herein by reference to
             Exhibit 10.28 to Form 10-K for the fiscal
             year ended December 31, 2001).+                               *

   10.22     Amendment Number Three dated April 9, 2002
             to the Amended and Restated Employment
             Agreement, effective March 27, 1996
             between F. Edward Gustafson and
             Viskase Companies, Inc.+                                     **

+     Management contract or compensatory plan or arrangement.
*     Previously filed by the Company, incorporated by reference.
**     Filed herewith
<PAGE>
Exhibit No.  Description of Exhibits                                     Page

   10.23     Amendment dated November 1, 2001 to the
             Employment Agreement between F. Edward
             Gustafson and Viskase Corporation dated
             August 30, 2001 (incorporated herein by
             reference to Exhibit 10.29 to Form 10-K
             for the fiscal year ended December 31, 2001).+                *

   10.24     Amendment Number Two dated April 9, 2002
             to the Employment Agreement between F.
             Edward Gustafson and Viskase Corporation
             dated August 30, 2001.+                                      **

   10.25     Employment Agreement dated November 29, 2001
             by and among Viskase Companies, Inc., Viskase
             Corporation and Gordon S. Donovan (incorporated
             herein by reference to Exhibit 10.30 to Form
             10-K for the fiscal year ended December 31, 2001).+           *

   10.26     Employment Agreement dated November 29, 2001
             by and among Viskase Companies, Inc., Viskase
             Corporation and Kimberly K. Duttlinger
             (incorporated herein by reference to Exhibit
             10.31 to Form 10-K for the fiscal year ended
             December 31, 2001).+                                          *

   10.27     Amendment No. 2 (the "Amendment") dated
             December 20, 2001 to the Rights Agreement
             dated June 26, 1996 (the "Agreement")
             between Envirodyne Industries, Inc., a
             Delaware corporation (now known as Viskase
             Companies, Inc. and Harris Trust Savings
             Bank, an Illinois banking corporation (the
             "Rights Agent") (incorporated herein by
             reference to Exhibit 4 to Form 8-K filed
             January 4, 2002).                                             *

   10.28     Waiver, Forbearance and Consent Agreement
             dated as of December 21, 2001 between
             Viskase Corporation and State Street Bank
             and Trust Company, as Owner Trustee, and
             General Electric Capital Corporation, as
             Owner Participant relating to the Lease
             Agreement dated December 18, 1990
             (incorporated herein by reference to
             Exhibit 10.33 to Form 10-K for the fiscal
             year ended December 31, 2001).                                *

   10.29     Amendment No. 1 dated as of January 17,
             2002 to the Waiver, Forbearance and
             Consent Agreement dated as of December
             21, 2001 between Viskase Corporation and
             State Street Bank and Trust Company, as
             Owner Trustee, and General Electric
             Capital Corporation, as Owner Participant
             relating to the Lease Agreement dated
             December 18, 1990 (incorporated herein
             by reference to Exhibit 10.34 to Form
             10-K for the fiscal year ended December 31, 2001).            *

   10.30     Viskase Corporation Management Incentive
             Plan for Fiscal Year 2002.+                                  **

   10.31     Amendment No. 3 to the Rights Agreement dated
             June 26, 1996 between Envirodyne Industries,
             Inc. (now known as Viskase Companies, Inc.)
             and Harris Trust and Savings Bank, an
             Illinois banking corporation (incorporated
             herein by reference to Exhibit 4 to
             Form 8-K filed June 27, 2002).                                *

   10.32     Forbearance and Consent Agreement, dated
             as of June 28, 2002, between Viskase
             Corporation, as Lessee, and State Street
             Bank and Trust Company, as successor Owner
             Trustee, and General Electric Capital
             Corporation, as Owner Participant, relating
             to Lease Agreement dated as of December 19,
             1990 (incorporated herein by reference to
             Exhibit 10 to Form 8-K filed June 28, 2002).                  *

+     Management contract or compensatory plan or arrangement.
*     Previously filed by the Company, incorporated by reference.
**    Filed herewith.
<PAGE>
Exhibit No.  Description of Exhibits                                     Page

   10.33     Restructuring Agreement, dated as of July 15,
             2002 by and among High River Limited
             Partnership, Debt Strategies Fund, Inc., and
             Northeast Investors Trust and Viskase Companies,
             Inc. (incorporated herein by reference to
             Exhibit 99.1 to Form 8-K filed August 21, 2002).              *

   10.34     Forbearance Agreement, dated as of November 14,
             2002 between Viskase Corporation, a
             Pennsylvania corporation (the "Lessee"),
             and State Street Bank and Trust Company,
             a Massachusetts trust company.                               **

   10.35     Side Letter Agreement of December 20, 2002
             between Viskase Companies, Inc. and General
             Electric Capital Corporation together with
             the Draft Amendment to the Lease Agreement
             and the Draft Amendment to the Participation
             Agreement.                                                   **

   10.36     Amendment No. 4 to the Rights Agreement
             dated June 26, 1996 between Envirodyne
             Industries, Inc. (now known as Viskase
             Companies, Inc.) and Harris Trust and
             Savings Bank, an Illinois banking
             corporation (incorporated herein by
             reference to Exhibit 1 to Form 8-K filed
             January 2, 2003).                                             *

   21.1      Subsidiaries of the registrant.                              **

   23.1      Consent of independent accountants.                          **

   99-1      Certification of Principal Executive Officer
             Pursuant to 18 U.S.C. Section 1350                           **

   99-2      Certification of Principal Financial Officer
             Pursuant to 18 U.S.C. Section 1350                           **



*     Previously filed by the Company, incorporated by reference.
**     Filed herewith.


(d)          Financial statement schedules required by
             Regulation S-X.                                             F-1
<PAGE>


                          SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                           VISKASE COMPANIES, INC.
                                           (Registrant)

                                         By: /s/ F. Edward Gustafson
                                             -------------------------------
                                             F. Edward Gustafson
                                             Chairman, Chief Executive
                                             Officer and President

                                         By: /s/ Gordon S. Donovan
                                             -------------------------------
                                             Gordon S. Donovan
                                             Vice President, Chief Financial
                                             Officer and Treasurer

Date: March 31, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on this 31st day of March 2003.


/s/ F. Edward Gustafson                    /s/ Gordon S. Donovan
-------------------------------            ---------------------------------
F. Edward Gustafson                        Gordon S. Donovan
Chairman of the Board, Chief               Vice President, Chief Financial
Executive Officer and President            Officer and Treasurer (Principal
(Principal Executive Officer)              Financial and Accounting Officer)


/s/ Robert N. Dangremond                   /s/ Gregory R. Page
-------------------------------            ---------------------------------
Robert N. Dangremond (Director)            Gregory R. Page (Director)

<PAGE>
                                    CERTIFICATIONS

I, F. Edward Gustafson, certify that:

1)  I have reviewed this annual report on Form 10-K of Viskase Companies,
    Inc.;

2)  Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary
    to make the statements made, in light of the circumstances under which
    such statements were made, not misleading with respect to the period
    covered by this annual report;

3)  Based on my knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in all
    material respects the financial condition, results of operations and cash
    flows of the registrant as of, and for, the periods presented in this
    annual report;

4)  The registrant's other certifying officers and I are responsible for
    establishing and maintaining disclosure controls and procedures (as
    defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
    we have:

    a)  designed such disclosure controls and procedures to ensure that
        material information relating to the registrant, including its
        consolidated subsidiaries, is made known to us by others within those
        entities, particularly during the period in which this annual report
        is being prepared;

    b)  evaluated the effectiveness of the registrant's disclosure controls
        and procedures as of a date within 90 days prior to the filing date
        of this annual report (the "Evaluation Date"); and

    c)  presented in this annual report our conclusions about the
        effectiveness of the disclosure controls and procedures based on our
        evaluation as of the Evaluation Date;

5)  The registrant's other certifying officers and I have disclosed, based on
    our most recent evaluation, to the registrant's auditors and the audit
    committee of registrant's board of directors (or persons performing the
    equivalent function):

    a)  all significant deficiencies in the design or operation of internal
        controls which could adversely affect the registrant's ability to
        record, process, summarize and report financial data and have
        identified for the registrant's auditors any material weaknesses in
        internal controls; and

    b)  any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        controls; and

6)  The registrant's other certifying officers and I have indicated in this
    annual report whether or not there were significant changes in internal
    controls or in other factors that could significantly affect internal
    controls subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies and
    material weaknesses.

Date:  March 31, 2003

                        /s/  F. Edward Gustafson
                        ------------------------
                             F. Edward Gustafson
                             Chairman, Chief Executive Officer and President

<PAGE>
I, Gordon S. Donovan, certify that:

1)  I have reviewed this annual report on Form 10-K of Viskase Companies,
    Inc.;

2)  Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary
    to make the statements made, in light of the circumstances under which
    such statements were made, not misleading with respect to the period
    covered by this annual report;

3)  Based on my knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in all
    material respects the financial condition, results of operations and cash
    flows of the registrant as of, and for, the periods presented in this
    annual report;

4)  The registrant's other certifying officers and I are responsible for
    establishing and maintaining disclosure controls and procedures (as
    defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
    we have:

    a)  designed such disclosure controls and procedures to ensure that
        material information relating to the registrant, including its
        consolidated subsidiaries, is made known to us by others within those
        entities, particularly during the period in which this annual report
        is being prepared;

    b)  evaluated the effectiveness of the registrant's disclosure controls
        and procedures as of a date within 90 days prior to the filing date
        of this annual report (the "Evaluation Date"); and

    c)  presented in this annual report our conclusions about the
        effectiveness of the disclosure controls and procedures based on our
        evaluation as of the Evaluation Date;

5)  The registrant's other certifying officers and I have disclosed, based on
    our most recent evaluation, to the registrant's auditors and the audit
    committee of registrant's board of directors (or persons performing the
    equivalent function):

    a)  all significant deficiencies in the design or operation of internal
        controls which could adversely affect the registrant's ability to
        record, process, summarize and report financial data and have
        identified for the registrant's auditors any material weaknesses in
        internal controls; and

    b)  any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        controls; and

6)  The registrant's other certifying officers and I have indicated in this
    annual report whether or not there were significant changes in internal
    controls or in other factors that could significantly affect internal
    controls subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies and
    material weaknesses.

Date:  March 31, 2003

                  /s/  Gordon S. Donovan
                  ----------------------
                       Gordon S. Donovan
                       Vice President, Chief Financial Officer and Treasurer
<PAGE>
               VISKASE COMPANIES, INC. AND SUBSIDIARIES

     INDEX OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

   Report of independent accountants .................................. F-2

   Consolidated balance sheets, December 31, 2002 and 2001 ............ F-3

   Consolidated statements of operations, for the years ended
      December 31, 2002, 2001 and 2000 ................................ F-4

   Consolidated statements of stockholders' deficit,
      for the years ended December 31, 2002, 2001 and 2000 ............ F-6

   Consolidated statements of cash flows, for the years ended
      December 31, 2002, 2001 and 2000 ................................ F-7

   Notes to consolidated financial statements ......................... F-8

FINANCIAL STATEMENT SCHEDULES REQUIRED BY REGULATION S-X

   Schedule II - Valuation and qualifying accounts ................... F-38

   Exhibit 21.1 Subsidiaries of the registrant ....................... F-39

   Exhibit 23.1 Consent of independent accountants ................... F-40

<PAGE>
                 REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
Viskase Companies, Inc.

In our opinion, the consolidated financial statements listed in the index
appearing under Item 15 (a) (1) on page 35 present fairly, in all material
respects, the financial position of Viskase Companies, Inc. and its
subsidiaries (the "Company") at December 31, 2002 and 2001, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 2002 in conformity with accounting principles
generally accepted in the United States of America. In addition, in our
opinion, the financial statement schedule listed in the index appearing under
Item 15 (a) (2) on page 35 present fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements and financial
statement schedule are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in
the United States of America which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

The accompanying consolidated financial statements have been prepared
assuming that Viskase Companies, Inc. and its subsidiaries will continue as a
going concern. As more fully described in Note 1 to the consolidated
financial statements, on November 13, 2002, Viskase Companies, Inc. filed a
voluntary petition for reorganization under Chapter 11 of the United States
Bankruptcy Code, which raises substantial doubt about the Company's ability
to continue as a going concern. Management's intentions with respect to this
matter are also described in Note 1. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.








PricewaterhouseCoopers LLP
Chicago, Illinois
March 14, 2003

<PAGE>
               VISKASE COMPANIES, INC. AND SUBSIDIARIES
                         (DEBTOR IN POSSESSION)
                      CONSOLIDATED BALANCE SHEETS
                            (in thousands)
<TABLE>
<CAPTION>
                                                                          December 31
                                                                  --------------------------
                                                                    2002             2001
                                                                  --------         ---------
<S>                                                          <C>              <C>
ASSETS
  Current assets:
    Cash and cash equivalents                                     $ 27,700         $ 25,540
    Restricted cash                                                 28,347           26,558
    Receivables, net                                                25,563           25,838
    Inventories                                                     30,587           29,064
    Other current assets                                             7,245            9,691
                                                                  --------         --------
      Total current assets                                         119,442          116,691

  Property, plant and equipment,
    including those under capital leases                           246,434          233,637
    Less accumulated depreciation
      and amortization                                             154,088          127,338
                                                                  --------         --------
    Property, plant and equipment, net                              92,346          106,299

  Deferred financing costs, net                                         39            2,024
  Other assets                                                       6,854            9,014
                                                                  --------         --------
      Total Assets                                                $218,681         $234,028
                                                                  ========         ========

LIABILITIES AND STOCKHOLDERS' DEFICIT
  Current liabilities not subject to compromise:
    Short-term debt including current portion
      of long-term debt and obligations
      under capital leases                                        $ 64,283         $236,059
    Accounts payable                                                11,649            9,784
    Accrued liabilities                                             27,918           48,203
    Current deferred income taxes                                    1,597            1,597
                                                                  --------         --------
      Total current liabilities not subject to compromise          105,447          295,643

Current liabilities subject to compromise                          188,198

  Long-term debt including obligations
    under capital leases not subject to compromise                      85              194

  Accrued employee benefits                                         75,621           51,116
  Noncurrent deferred income taxes                                  24,476           25,128

  Commitments and contingencies

  Stockholders' (deficit):
    Preferred stock, $.01 par value;
      none outstanding
    Common stock, $.01 par value;
      issued and outstanding, 15,314,562 shares
      at December 31, 2002 and
      15,317,112 shares at December 31, 2001                           153              153
    Paid in capital                                                138,007          138,014
    Accumulated (deficit)                                         (291,904)        (272,574)
    Accumulated other comprehensive (loss)                         (21,323)          (3,461)
    Unearned restricted stock issued
      for future service                                               (79)            (185)
                                                                  --------         --------
      Total stockholders' (deficit)                               (175,146)        (138,053)
                                                                  --------         --------
      Total Liabilities and Stockholders' Deficit                 $218,681         $234,028
                                                                  ========         ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
                                VISKASE COMPANIES, INC. AND SUBSIDIARIES
                                        (DEBTOR IN POSSESSION)
                                  CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                  Years Ended December 31
                                                      -----------------------------------------------
                                                        2002               2001               2000
                                                      --------           --------           --------
                                                         (in thousands, except for number of shares
                                                                   and per share amounts)
<S>                                               <C>                <C>                <C>
NET SALES                                             $183,577           $189,315           $200,142

COSTS AND EXPENSES
  Cost of sales                                        146,841            156,258            157,560
  Selling, general and administrative                   38,526             40,027             39,374
  Amortization of intangibles                            2,000              2,000              2,000
  Restructuring (income) expense                        (6,132)             4,766             94,910
                                                      ---------          ---------          ---------

OPERATING INCOME (LOSS)                                  2,342            (13,736)           (93,702)

  Interest income                                        1,161              2,479              2,299
  Interest expense                                      22,222             25,520             45,406
  Other (income) expense, net                           (1,493)             3,445              5,330
  Patent infringement settlement income, net                                                  46,900
                                                      ---------          ---------          ---------

(LOSS) FROM CONTINUING OPERATIONS
  BEFORE TAXES AND REORGANIZATION EXPENSE              (17,226)           (40,222)           (95,239)

  Reorganization expense                                 3,401
                                                      ---------          ---------          ---------

(LOSS) FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES                                  (20,627)           (40,222)           (95,239)

  Income tax (benefit) provision                        (1,297)            (3,370)               728
                                                      ---------          ---------          ---------

(LOSS) FROM CONTINUING OPERATIONS                      (19,330)           (36,852)           (95,967)

DISCONTINUED OPERATIONS:

  Income from discontinued operations
    net of income taxes (Note 12)                                                              3,435

  Gain on sale from discontinued operations
    net of income tax provision of $0 in 2001 and
    $6,633 in 2000                                                          3,189             68,185
                                                      ---------          ---------          ---------

(LOSS) BEFORE
  EXTRAORDINARY ITEM                                   (19,330)           (33,663)           (24,347)

  Extraordinary gain on early extinguishment of
    debt net of income tax provision of
    $0 in 2001 and $633 in 2000                                             8,137              6,511
                                                      ---------          ---------          ---------

NET (LOSS)                                             (19,330)           (25,526)           (17,836)

  Other comprehensive (loss) income, net of
    tax (see Note 20)
  Foreign currency translation adjustments               3,711               (129)            (2,730)
  Reclassification of foreign currency translation
    adjustment for discontinued operations                                                     2,532
  Minimum pension liability adjustments                (21,573)            (5,172)
                                                      ---------          ---------          ---------
  Other comprehensive (loss) net of tax                (17,862)            (5,301)              (198)
                                                      ---------          ---------          ---------

COMPREHENSIVE (LOSS)                                  $(37,192)          $(30,827)          $(18,034)
                                                      =========          =========          =========
</TABLE>
<PAGE>
                                     VISKASE COMPANIES, INC. AND SUBSIDIARIES
                                             (DEBTOR IN POSSESSION)
                                  CONSOLIDATED STATEMENTS OF OPERATIONS (Cont'd)
<TABLE>
<CAPTION>
                                                                Years Ended December 31
                                                    ------------------------------------------------
                                                       2002               2001               2000
                                                    ----------         ----------         ----------
                                                       (in thousands, except for number of shares
                                                                   and per share amounts)
<S>                                              <C>                <C>                <C>
WEIGHTED AVERAGE COMMON SHARES
  - BASIC AND DILUTED                               15,316,183         15,309,616         15,126,670
                                                    ==========         ==========         ==========

PER SHARE AMOUNTS:

(LOSS) EARNINGS PER SHARE
  - basic and diluted

  Continuing operations                                $(1.26)            $(2.41)            $(6.34)

  Discontinued operations:
    Income from discontinued operations                                                         .23

    Gain on sale from discontinued operations                                .21               4.50
                                                       -------            -------            -------

  (Loss) before extraordinary item                     $(1.26)             (2.20)             (1.61)

    Extraordinary gain                                                       .53                .43
                                                       -------            -------            -------

Net (Loss)                                             $(1.26)            $(1.67)            $(1.18)
                                                       =======            =======            =======
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

<PAGE>

                           VISKASE COMPANIES, INC. AND SUBSIDIARIES
                                     (DEBTOR IN POSSESSION)
                       CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                              Accumulated Other
                                                         Comprehensive (Loss) Gain
                                                         -------------------------

                                                               Foreign      Minimum     Restricted
                                                    Accumu-    Currency     Pension       Stock
                                  Common Paid In    lated    Translation   Liability    Issued For         Total
                                  Stock  Capital  (Deficit)  Adjustments  Adjustments  Future Service  Equity (Deficit)
                                  ------ -------  ---------  -----------  -----------  --------------  ----------------
                                                                     (in thousands)
<S>                              <C>    <C>         <C>          <C>       <C>            <C>           <C>
Balance December 31, 1999           $151   $137,454    $(229,212)   $2,165                                   $(89,442)
Net (loss)                                               (17,836)                                             (17,836)
Issuance of Common Stock               2        513                                           $(309)              206
Other comprehensive (loss)                                            (325)                                      (325)
                                    ----   ---------   ----------   -------   ---------       ------        ----------
Balance December 31, 2000            153    137,967     (247,048)    1,840                     (309)         (107,397)
Net (loss)                                               (25,526)                                             (25,526)
Issuance of Common Stock                         47                                             124               171
Other comprehensive (loss)                                            (129)    $(5,172)                        (5,301)
                                    ----   ---------   ----------   -------   ---------       ------        ----------
Balance December 31, 2001            153    138,014     (272,574)    1,711      (5,172)        (185)         (138,053)
Net (loss)                                               (19,330)                                             (19,330)
Issuance of Common Stock                         (7)                                            106                99
Other comprehensive income (loss)                                    3,711     (21,573)                       (17,862)
                                    ----   ---------   ----------   -------   ---------       ------        ----------
Balance December 31, 2002           $153   $138,007    $(291,904)   $5,422    $(26,745)        $(79)        $(175,146)
                                    ====   =========   ==========   =======   =========       ======        ==========

</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.

<PAGE>
                           VISKASE COMPANIES, INC. AND SUBSIDIARIES
                                    (DEBTOR IN POSSESSION)
                             CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           Years Ended December 31
                                                                                ---------------------------------------
                                                                                   2002           2001           2000
                                                                                ----------     ----------     ---------
                                                                                             (in thousands)
<S>                                                                          <C>            <C>            <C>
Cash flows from operating activities:
  Net (Loss)                                                                    $(19,330)      $(25,526)      $(17,836)

  Adjustments to reconcile net (loss) to net cash
    provided by (used in) operating activities:
      Depreciation and amortization under capital leases                          20,959         21,125         30,427
      Amortization of intangibles                                                  2,000          2,000          4,000
      Amortization of deferred financing fees and discount                            18            185          4,860
      Reorganization expense                                                       3,401
      (Decrease) increase in deferred income taxes                                  (718)          (698)           407
      Foreign currency transaction (gain) loss                                      (920)           533            857
      Gain on disposition of assets                                                  (27)        (2,807)       (74,541)
      Bad debt provision                                                             558            425            433
      Net property, plant and equipment write-off                                  1,029          4,766         55,482
      Extraordinary gain on debt extinguishment                                                  (8,137)        (7,144)

      Changes in operating assets and liabilities
        (net of effects of dispositions):
        Receivables                                                                2,746            803         20,431
        Inventories                                                                  507          9,596          8,617
        Other current assets                                                       2,860          6,361        (12,733)
        Accounts payable and accrued liabilities                                   4,432        (30,111)           (50)
        Other                                                                        749          4,155          3,270
                                                                                ---------      ---------      ---------
      Total adjustments                                                           37,594          8,196         34,316
                                                                                ---------      ---------      ---------

      Net cash provided by (used in) operating activities                         18,264        (17,330)        16,480
        before reorganization expense

Net cash used for reorganization items                                            (1,259)

Cash flows from investing activities:
  Capital expenditures                                                            (3,824)        (5,882)       (13,735)
  Proceeds from disposition of assets                                                575         11,156        235,844
  Restricted cash                                                                 (1,789)        14,480        (41,038)
                                                                                ---------      ---------      ---------
      Net cash (used in) provided by investing activities                         (5,038)        19,754        181,071

Cash flows from financing activities:
  Deferred financing costs                                                                       (2,047)        (2,092)
  Repayment of revolving loan, long-term borrowings and
    capital lease obligations                                                     (8,882)       (29,448)      (146,119)
                                                                                ---------      ---------      ---------
      Net cash (used in) financing activities                                     (8,882)       (31,495)      (148,211)

Effect of currency exchange rate changes on cash                                    (925)          (739)          (233)
                                                                                ---------      ---------      ---------
Net increase (decrease) in cash and equivalents                                    2,160        (29,810)        49,107
Cash and equivalents at beginning of period                                       25,540         55,350          6,243
                                                                                ---------      ---------      ---------
  Cash and equivalents at end of period                                         $ 27,700       $ 25,540       $ 55,350
                                                                                =========      =========      =========


Supplemental cash flow information and noncash investing and financing
activities:

   Interest paid less capitalized interest                                      $  3,150       $ 11,716       $ 49,884
   Income taxes (refunded) paid                                                 $ (1,210)      $  4,690       $    750
   Capital lease obligations (machinery and equipment)                          $      0       $      0       $    694
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
                       VISKASE COMPANIES, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   PROCEEDINGS UNDER CHAPTER 11 AND BASIS OF PRESENTATION (in
thousands, except number of shares and per share and per bond amounts)

On November 13, 2002, Viskase Companies, Inc., a stand-alone entity (VCI),
filed a prepackaged Chapter 11 bankruptcy in the Bankruptcy Court. The
Chapter 11 filing is for VCI only and does not include any domestic or
foreign subsidiaries. On December 20, 2002 the Bankruptcy Court confirmed The
Plan, as modified. VCI expects to consummate The Plan, as modified, and
emerge from Chapter 11 bankruptcy in early April, 2003.

Cash flows from operations for the Company ("Company" means Viskase
Companies, Inc. and its subsidiaries) were insufficient to pay the Senior
Notes when they matured on December 1, 2001, and accordingly the Company did
not pay the $163,060 principal and $8,357 interest that became due at that
time. In September 2001, certain of the holders of the Senior Notes formed an
Ad Hoc Committee to participate in the development of a plan to restructure
the Company's capital structure and address its future cash flow needs. On
July 15, 2002, the Company executed a restructuring agreement with the Ad Hoc
Committee for the restructuring of the Senior Notes. Under terms of the
restructuring agreement, on or about August 21, 2002 the Company initiated an
exchange offer to exchange the Senior Notes for New Notes and shares of
Preferred Stock. The proposed exchange offer was subject to acceptance by
holders of 100% of the outstanding Senior Notes, unless waived by the Company
and approved by the Ad Hoc Committee. The exchange offer was conducted
simultaneously with a solicitation for the Plan for the Company which
required the consent of a majority in number of the holders and at least 66-
2/3% in principal amount of Senior Notes actually voting in the solicitation.
Under the restructuring agreement, if less than 100% of the outstanding
Senior Notes accepted the exchange offer, but a sufficient number of holders
and aggregate amount of Senior Notes voted in favor of acceptance of the
Plan, the Company agreed to commence a voluntary Chapter 11 petition to seek
confirmation of the Plan. The Plan contains substantially the same economic
terms as the exchange offer.

Although 100% of the outstanding Senior Notes did not accept the exchange
offer, the Company did receive votes to accept the Plan from approximately
91.4% of the holders and 91.4% in the outstanding principal amount that
actually voted. Accordingly, on November 13, 2002, VCI filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court
to seek confirmation of the Plan. Under Chapter 11, the Company may operate
its business in the ordinary course, subject to prior Bankruptcy Court
approval of transactions outside the ordinary course and certain other
matters.

The Chapter 11 filing was for VCI only. The Chapter 11 filing does not
include any of the Company's domestic or foreign operating subsidiaries.
Therefore, the Company's operating subsidiaries continued to provide an
uninterrupted supply of products and services to customers worldwide. Trade
creditors and vendors have been totally unaffected and continue to be paid in
the ordinary course of business, and the operating subsidiaries' employees
have been paid all wages, salaries and benefits on a timely basis.

Under the terms of the Plan, the Company's wholly owned operating subsidiary,
Viskase, will be merged with and into VCI immediately prior to or upon
consummation of the Plan with VCI being the surviving corporation. The
outstanding Senior Notes will receive New Notes and shares of new common
stock (New Common Stock) to be issued by the Company on a basis of $367.96271
principal amount of New Notes (i.e., $60,000) and 63.4122 shares of New
Common Stock (i.e., 10,340,000 shares or 94% of the New Common Stock) for
each one thousand dollar principal amount of Senior Notes. The existing
shares of common stock of the Company will be canceled. Holders of the old
common stock (Old Shares) will receive Warrants with a term of seven years to
purchase shares of New Common Stock equal to 2.7% of the Company's New Common
Stock at an exercise price of $10.00 per share (Warrant). Assuming all
Warrants are exercised, holders of the Senior Notes would receive
approximately 91.5% of the New Common Stock and approximately 5.8% would be
issued or reserved for issuance to the Company's management and employees.

<PAGE>
Under the proposed restructuring, 660,000 shares of New Common Stock (or upon
the request of Company management, options to purchase 660,000 shares of New
Common Stock), initially representing 6% of the New Common Stock, will be
reserved for Company management and employees. Such shares or options will be
subject to a vesting schedule with acceleration upon the occurrence of
certain events.

The New Notes would bear interest at a rate of 8% per year, and will accrue
interest from December 1, 2001, payable semi-annually (except annually with
respect to year four and quarterly with respect to year five), with interest
payable in the form of New Notes (pay-in-kind) for the first three years.
Interest for years four and five will be payable in cash to the extent of
available cash flow, as defined, and the balance in the form of New Notes
(pay-in-kind). Thereafter, interest will be payable in cash. The New Notes
would mature on December 1, 2008 with an accreted value of approximately
$89,453, assuming interest in the first 5 years is paid in the form of New
Notes (paid-in-kind).

The New Notes would be secured by a first lien on the assets of the Company,
other than the assets subject to the General Electric Capital Corporation
(GECC) lease and certain real estate, post-merger. The New Notes would be
subject to subordination of up to $25,000 principal amount for a secured
working capital credit facility for the Company.

Upon completion of the proposed restructuring the Board of Directors of the
Company would be reconstituted to consist of five members, including the
Company's Chief Executive Officer and four other persons designated by the Ad
Hoc Committee.

The Ad Hoc Committee has retained legal counsel. The fees and expenses were
paid by the Company until the commencement of the Bankruptcy.

In addition, the members of the Ad Hoc Committee have agreed not to transfer
(other than to another member of the Ad Hoc Committee or an affiliate of a
member) their shares of New Common Stock for a period of two years after the
restructuring is completed. For a period of one year thereafter, the Company
would have a right of first refusal to either purchase or designate a
purchaser for shares of New Common Stock to be transferred by a member of the
Ad Hoc Committee to a person other than another member of the Ad Hoc
Committee or their affiliates.

Under Chapter 11, certain claims against VCI (the Debtor) in existence prior
to the Petition Date (November 13, 2002) were stayed while the Company
continued business operations as a debtor-in-possession. These claims are
reflected in the December 31, 2002 balance sheet as "Current liabilities
subject to compromise." As of the Petition Date, the Company stopped accruing
interest on the 10.25% Senior Notes. The interest not accrued from the
Petition Date through December 31, 2002 is $2,294.

The principal categories of claims reclassified in the Consolidated Balance
Sheets and included in Current liabilities subject to compromise are
identified below. These amounts may be subject to future adjustments
depending on Bankruptcy Court actions, further developments with respect to
disputed claims, the existence and value of any collateral securing such
claims and other events. At the Petition Date the amounts reflected below are
for the Senior Notes and accrued interest through the Petition Date.

Current liabilities subject to compromise are as follows (dollars in
thousands):

<TABLE>
<CAPTION>
                                          December 31, 2002     Petition Date
                                          -----------------     -------------
<S>                                        <C>               <C>
   10.25% Senior Notes                          $163,060           $163,060
   Accrued interest                               25,098             25,098
   Other current liabilities                          40                 40
                                                --------           --------
                                                $188,198           $188,198
                                                ========           ========
</TABLE>
<PAGE>

The accompanying consolidated financial statements have been prepared in
accordance with the American Institute of Certified Public Accounts Statement
of Position 90-7: Financial Reporting by Entities in Reorganization under the
Bankruptcy Code and have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which contemplates
continuity of operations and assumes the realization of assets and
liquidation of liabilities in the ordinary course of business.

Accordingly, all pre-petition liabilities subject to compromise have been
segregated in the consolidated balance sheets and have been classified as
such at the estimated amount of allowable claims. Liabilities not subject to
compromise have been separately classified as current and non-current.
Expenses and gains and losses resulting from the reorganization have been
separately reported as reorganization items on the consolidated statements of
operations. Cash used for reorganization is disclosed separately in the
consolidated statements of cash flows.

Following the approval of a plan of reorganization, SOP 90-7 requires that
the Company adopt "Fresh Start" accounting resulting in recording all assets
and liabilities at fair value. Upon emergence from bankruptcy, the amounts
and classifications reported in the consolidated historical financial
statements could materially change.

Condensed financial information of the Debtor subsequent to the Petition Date
is presented below:

                          VISKASE COMPANIES, INC.
                         CHAPTER 11 FILING ENTITY
                DEBTOR-IN-POSSESSION STATEMENT OF OPERATIONS
                      (UNAUDITED) DOLLARS IN THOUSANDS

<TABLE>
<CAPTION>
                                                                             November 13, 2002
                                                                                      to
                                                                             December 31, 2002
                                                                             -----------------

<S>                                                                           <C>
  Selling, general and administrative                                                $   49
  Other (income) expense, net                                                            30
  Intercompany interest income, net                                                   5,049
                                                                                     ------
    Income from continuing operations before taxes and reorganization items           4,970

   Reorganization expense                                                               452
   Income tax provision                                                                   0
                                                                                     ------

      NET INCOME                                                                     $4,518
                                                                                     ======
</TABLE>

<PAGE>
                          VISKASE COMPANIES, INC.
                         CHAPTER 11 FILING ENTITY
                            DEBTOR-IN-POSSESSION
                      CONDENSED STATEMENT OF CASH FLOWS
                       (UNAUDITED) DOLLARS IN THOUSANDS

<TABLE>
<CAPTION>
                                                                             November 13, 2002
                                                                                      to
                                                                             December 31, 2002
                                                                             -----------------

<S>                                                                           <C>
Cash flows from operating activities:
   Net income                                                                       $ 4,518

   Adjustments to reconcile net income to net cash:
      Changes in operating assets and liabilities
         Other current assets                                                          (169)
         Accrued liabilities                                                            461
         (Decrease) in deferred tax                                                     (26)
         Intercompany accounts                                                       (4,855)
         Other                                                                           19
                                                                                    --------
      Net cash (used in) operating activities                                           (52)
      Net decrease in cash and equivalents                                              (52)
Cash and equivalents at Petition Date                                                     0
                                                                                    --------
   Cash and equivalents at end of period                                            $   (52)
                                                                                    ========
</TABLE>

                          VISKASE COMPANIES, INC.
                         CHAPTER 11 FILING ENTITY
                    DEBTOR-IN-POSSESSION BALANCE SHEET
                     (UNAUDITED) DOLLARS IN THOUSANDS

<TABLE>
<CAPTION>
                                                                             December 31, 2002
                                                                             -----------------
<S>                                                                    <C>
ASSETS
   Current assets
      Other current assets                                                        $     169
                                                                                  ---------
         Total current assets                                                           169

   Property, plant and equipment, net                                                     0
   Deferred financing                                                                    39
   Intercompany receivables                                                         411,629
   Investment in affiliate entities                                                (348,254)
                                                                                  ----------
         Total assets                                                             $  63,583
                                                                                  ==========

LIABILITIES AND STOCKHOLDERS' DEFICIT
   Current liabilities not subject to compromise:
      Overdrafts payable                                                          $      52
      Accounts payable                                                                  407
      Accrued liabilities                                                                54
                                                                                  ----------
         Total current liabilities not subject to compromise                            513

Current liabilities subject to compromise                                           188,198

Deferred income taxes                                                                50,018
                                                                                  ----------
         Total liabilities                                                          238,729

      Stockholders' deficit                                                        (175,146)
                                                                                  ----------

         Total Liabilities and Stockholders' Deficit                              $  63,583
                                                                                  ==========
</TABLE>

<PAGE>
In addition to the Company's financial reporting obligations as prescribed by
the U.S. Securities and Exchange Commission (SEC), the Debtor is also
required, under the rules and regulations under the Bankruptcy Code, to
periodically file certain statements and schedules and a monthly operating
report with the Bankruptcy Court. This information is available to the public
through the Bankruptcy Court. This information is prepared in a format that
may not be comparable to information in the Company's quarterly and annual
financial statements as filed with the SEC. The monthly operating reports are
not audited, do not purport to represent the financial position or results of
operations and cash flows of the Company on a consolidated basis and should
not be relied on for such purposes.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A)   Principles of consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. Intercompany accounts and transactions have
been eliminated in consolidation.

(B)   Reclassification

Reclassifications have been made to the prior years' financial statements to
conform to the 2002 presentation.

(C)   Use of estimates in the preparation of financial statements

The preparation of financial statements includes the use of estimates and
assumptions that affect a number of amounts included in the Company's
financial statements, including, among other things, pensions and other
postretirement benefits and related disclosures, inventories valued under the
last-in-first-out (LIFO) method, reserves for excess and obsolete inventory,
restructuring charges and income taxes. Management bases its estimates on
historical experience and other assumptions that they believe are reasonable.
If actual amounts are ultimately different from previous estimates, the
revisions are included in the Company's results for the period in which the
actual amounts become known. Historically, the aggregate differences, if any,
between the Company's estimates and actual amounts in any year have not had a
significant impact on the Company's consolidated financial statements.

(D)   Cash equivalents (dollars in thousands)

For purposes of the statement of cash flows, the Company considers cash
equivalents to consist of all highly liquid debt investments purchased with
an initial maturity of approximately three months or less. Due to the short-
term nature of these instruments, the carrying values approximate the fair
market value. Cash equivalents and restricted cash include $52,193 and
$44,840 of short-term investments at December 31, 2002 and December 31, 2001,
respectively. The 2002 restricted cash is principally cash held as collateral
for outstanding letters of credit with a commercial bank. Included within
restricted cash is a letter of credit of $2,109 which F. Edward Gustafson,
Chairman of the Board, President and Chief Executive Officer, is the
beneficiary. The letter of credit supports amounts payable under his
Employment Agreements.

(E)   Inventories

Domestic inventories are valued primarily at the lower of last-in, first-out
(LIFO) cost or market. Remaining inventories, primarily foreign, are valued
at the lower of first-in, first-out (FIFO) cost or market.

<PAGE>
(F)   Property, plant and equipment

The Company carries property, plant and equipment at cost less accumulated
depreciation. Property and equipment additions include acquisition of
property and equipment and costs incurred for computer software purchased for
internal use including related external direct costs of materials and
services and payroll costs for employees directly associated with the
project. Depreciation is computed on the straight-line method over the
estimated useful lives of the assets ranging from 2 to 32 years. Upon
retirement or other disposition, cost and related accumulated depreciation
are removed from the accounts, and any gain or loss is included in results of
operations.

(G)   Deferred financing costs

Deferred financing costs are amortized on a straight-line basis over the
expected term of the related debt agreement. Amortization of deferred
financing costs is classified as interest expense.

(H)   Patents (dollars in thousands)

Patents are amortized on the straight-line method over an estimated average
useful life of ten years. Patent defense costs are capitalized. There were no
capitalized patent defense costs at December 31, 2002.

Patent defense costs of $7,850 were written off at the time of the settlement
of certain patent litigation in 2000 (See Note 15).

(I)   Long-lived assets

The Company continues to evaluate the recoverability of long-lived assets
including property, plant and equipment and patents. Impairments are
recognized when the expected undiscounted future operating cash flows derived
from long-lived assets are less than their carrying value. If impairment is
identified, valuation techniques deemed appropriate under the particular
circumstances will be used to determine the asset's fair value. The loss will
be measured based on the excess of carrying value over the determined fair
value. The review for impairment is performed at least once a year or when
circumstances warrant.

(J)   Accounts Payable (dollars in thousands)

The Company's cash management system provides for the daily replenishment of
its bank accounts for check-clearing requirements. The outstanding check
balances of $420 and $721 at December 31, 2002 and December 31, 2001,
respectively, are not deducted from cash but are reflected in accounts
payable in the consolidated balance sheets.

(K)   Pensions and other postretirement benefits

The North American operations of Viskase and the Company's operations in
Europe have defined benefit retirement plans covering substantially all
salaried and full time hourly employees. Pension cost is computed using the
projected unit credit method. The Company's funding policy is consistent with
funding requirements of the applicable federal and foreign laws and
regulations.

The North American operations of Viskase have postretirement health care and
life insurance benefits. The Company accrues for the accumulated
postretirement benefit obligation which represents the actuarial present
value of the anticipated benefits. Measurement is based on assumptions
regarding such items as the expected cost of providing future benefits and
any cost sharing provisions.

<PAGE>
(L)   Income taxes

Deferred tax assets and liabilities are measured using enacted tax laws and
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities due to a change in tax rates is
recognized in income in the period that includes the enactment date. In
addition, the amounts of any future tax benefits are reduced by a valuation
allowance to the extent such benefits are not expected to be realized on a
more likely than not basis.

(M)   Net (loss) per share

Net (loss) per share of common stock is based upon the weighted average
number of shares of common stock outstanding during the year. No effect has
been given to options outstanding under the Company's stock option plan, as
their effect is anti-dilutive.

(N)   Other comprehensive income

Comprehensive income includes all other non-shareholder changes in equity. As
of December 31, 2002, changes in other comprehensive income primarily
resulted from changes in foreign currency translation adjustments and a
minimum pension liability adjustment.

(O)   Revenue recognition

Substantially all of the Company's revenues are recognized at the time
products are shipped to customers, under F.O.B. Shipping Point and F.O.B.
Port Terms. Revenues are net of any discounts and allowances. The Company
records all related shipping and handling costs as a component of cost of
goods sold. The SEC's SAB No. 101, "Revenue Recognition in Financial
Statements", provides guidance on the application of generally accepted
accounting principles to selected revenue recognition issues. The Company's
revenue recognition policy is in accordance with generally accepted
accounting principles and SAB No. 101.

(P)   Futures contracts

The Company purchases gas futures contracts to lock in set rates on gas
purchases. The Company uses this strategy to minimize its exposure to
volatility in natural gas. These products are not linked to specific assets
and liabilities that appear on the balance sheet or to a forecasted
transaction and, therefore, do not qualify for hedge accounting. As such, the
loss on the change in fair value of the futures contracts was recorded in
other expense and was immaterial.

(Q)   Stock-based compensation

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure." This statement amends SFAS No.
123, "Accounting for Stock-Based Compensation," to provide alternative
methods of transition for a voluntary change to fair value based method of
accounting for stock-based employee compensation. The provisions of this
statement are effective for financial statements for fiscal years ending
after December 15, 2002. Management has adopted the footnote disclosure
provisions and is considering the recognition provisions of the standard and
its effects on the Company's financial statements.

<PAGE>
SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but does
not require, companies to recognize compensation expense for grants of stock,
stock options and other equity instruments to employees based on new fair
value accounting rules. Although expense recognition for employee stock-based
compensation is not mandatory, SFAS No. 123 requires companies that choose
not to adopt the new fair value accounting to disclose pro forma net income
and earnings per share under the new method. The Company has not adopted fair
value accounting, and, accordingly, no compensation cost has been recognized
for employee stock-based compensation. The Company has complied with the
disclosure requirements of SFAS No. 123 and SFAS No. 148 as follows:

<TABLE>
<CAPTION>
                                                                 2002          2001          2000
                                                              ---------     ---------     ---------
<S>                                                       <C>           <C>            <C>
Net (loss) before extraordinary item, as reported             $(19,330)     $(33,663)     $(24,347)
Deduct: total stock-based employee compensation
   expense determined under fair value based
   method for all awards, net of related tax effects                (0)         (515)         (160)
                                                              ---------     ---------     ---------
Pro forma net (loss) before extraordinary item                 (19,330)      (34,178)      (24,507)

Net (loss), as reported                                        (19,330)      (25,526)      (17,836)
Deduct: total stock-based employee compensation
   expense determined under fair value based
   method for all awards, net of related tax effects                (0)         (515)         (160)
                                                              ---------     ---------     ---------
Pro forma net (loss)                                           (19,330)      (26,041)      (17,996)

PER SHARE AMOUNTS:

Net (loss) before extraordinary item, as reported
  - basic and diluted EPS                                       $(1.26)       $(2.20)       $(1.61)
Pro forma net (loss) before extraordinary item
  - basic and diluted EPS                                        (1.26)        (2.23)        (1.62)

Net (loss) - basic and diluted EPS, as reported                 $(1.26)       $(1.67)       $(1.18)
Pro forma net (loss) - basic and diluted EPS                     (1.26)        (1.70)        (1.19)
</TABLE>

(R)   Accounting standards

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 143, "Accounting for
Asset Retirement Obligations." The statement applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development and (or) the normal operation of a
long-lived asset, except for certain obligations of lessees. The provisions
of this statement are required to be applied for fiscal years beginning after
June 15, 2002. The Company is considering the Standard and its effect on the
Company's financial statements.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." The statement is applicable for fiscal years beginning after
May 15, 2002 and requires, among other things, that any gain or loss on
extinguishment of debt that does not meet criteria in Opinion 30, as amended,
no longer be classified as an extraordinary item. The gain of $8,137, net of
income taxes, relating to the repurchase of Senior Notes in 2001 and the gain
of $6,511, net of income taxes, relating to the repurchase of Senior Notes in
2000, were reported as extraordinary items in the Company's consolidated
statements of operations for the years then ended.  In 2003, these prior
period extraordinary items will be reclassified in the consolidated
statements of operations as a separate caption along with interest expense in
accordance with this statement.

<PAGE>
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." The statement requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
This statement replaces previous accounting guidance provided by Emerging
Issues Task Force (EITF) Issue No. 94-3. Statement 146 is to be applied
prospectively to exit or disposal activities initiated after December 31,
2002. The provisions of this Statement will prospectively apply to exit or
disposal activities initiated after December 31, 2002.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others." The interpretation elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
It also clarifies that a guarantor is required to recognize, at the inception
of a guarantee, a liability for the fair value of the obligation undertaken
in issuing the guarantee. The provisions of this interpretation are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The disclosure requirements are effective for financial
statements of interim or annual periods ending after December 15, 2002. The
Company will apply the provisions of this interpretation to guarantees issued
after December 31, 2002. The Company is in compliance with the disclosure
requirements of the interpretation.

3.   RECEIVABLES (dollars in thousands)

Receivables consisted primarily of trade accounts receivable and were net of
allowances for doubtful accounts of $1,334 and $1,470 at December 31, 2002
and December 31, 2001, respectively.

Viskase Companies, Inc. has a broad base of customers, with no single
customer accounting for more than 6% of sales or 4% of receivables.

4.   INVENTORIES (dollars in thousands)

Inventories consisted of:

<TABLE>
<CAPTION>
                                                       2002          2001
                                                     -------       -------
<S>                                             <C>            <C>
Raw materials                                        $ 3,872       $ 3,173
Work in process                                       13,394        13,131
Finished products                                     13,321        12,760
                                                     -------       -------
                                                     $30,587       $29,064
                                                     =======       =======
</TABLE>

Approximately 52% and 54% of the Company's inventories at December 31, 2002
and December 31, 2001, respectively, were valued at LIFO. Remaining
inventories, primarily foreign, are valued at the lower of first-in, first-
out (FIFO) cost or market. At December 31, 2002 and December 31, 2001 the
LIFO values exceeded current manufacturing cost by approximately $687 and
$799, respectively. During 2002 and 2001, the Company wrote down $383 and
$3,612 of LIFO inventories, respectively, to its lower of cost or market
value. The charge is included in cost of sales. Inventories were net of
reserves for obsolete and slow moving inventory of $2,725 and $2,816 at
December 31, 2002 and December 31, 2001 respectively.

<PAGE>
5.   PROPERTY, PLANT AND EQUIPMENT (dollars in thousands)

<TABLE>
<CAPTION>
                                                          2002         2001
                                                       --------     --------
<S>                                               <C>           <C>
Property, plant and equipment:
   Land and improvements                               $  4,253     $  4,468
   Buildings and improvements                            28,631       26,242
   Machinery and equipment                              121,185      111,193
   Construction in progress                               3,428        2,797
Capital leases:
   Machinery and equipment                               88,937       88,937
                                                       --------     --------
                                                       $246,434     $233,637
                                                       ========     ========
</TABLE>

Capitalized interest in 2002, 2001 and 2000 totaled $81, $290 and $443,
respectively. Maintenance and repairs charged to costs and expenses for 2002,
2001 and 2000 aggregated $13,142, $12,789 and $22,836, respectively. The
decrease in maintenance and repairs expense in 2002 and 2001 is due to the
sale of the Films Business in August 2000. Depreciation is computed on the
straight-line method over the estimated useful lives of the assets. Estimated
useful lives of land improvements range from 15 to 30 years; building and
improvements range from 10 to 32 years; and machinery and equipment,
including capital leases, range from 2 to 15 years.

Land and buildings include property held for sale. The properties have a net
book value of $4,162 and $4,678 at December 31, 2002 and December 31, 2001,
respectively. During 2002, properties held for sale with a net book value of
$541 were disposed of.

6.   OTHER ASSETS (dollars in thousands)

<TABLE>
<CAPTION>
                                                          2002          2001
                                                        -------      -------
<S>                                                 <C>           <C>

Patents                                                 $20,000       $20,000
   Less accumulated amortization                         18,000        16,000
                                                        -------       -------
      Patents, net                                        2,000         4,000
Miscellaneous                                             4,854         5,014
                                                        -------       -------
                                                        $ 6,854       $ 9,014
                                                        =======       =======
</TABLE>

Patents are amortized on the straight-line method over an estimated average
useful life of ten years. Miscellaneous other assets include income tax
refund receivables in the amount of $3,870 and $3,949 at December 31, 2002
and December 31, 2001, respectively.

7.   ACCRUED LIABILITIES NOT SUBJECT TO COMPROMISE (dollars in thousands)

Accrued liabilities were comprised of:
<TABLE>
<CAPTION>
                                                          2002          2001
                                                        -------       -------
<S>                                               <C>             <C>

Compensation and employee benefits                      $13,528       $10,668
Taxes                                                     3,911         3,070
Accrued volume and sales discounts                        2,285         2,124
Restructuring (see Note 11)                               2,773        15,094
Accrued interest (see Note 8)                                 0         9,821
Other                                                     5,421         7,426
                                                        -------       -------
                                                        $27,918       $48,203
                                                        =======       =======
</TABLE>
<PAGE>

8.   DEBT OBLIGATIONS (dollars and shares in thousands, except for number of
shares and per share and per bond amounts)

Outstanding short-term and long-term debt consisted of:
<TABLE>
<CAPTION>
                                                                         2002           2001
                                                                       --------       --------
<S>                                                                <C>            <C>
Short-term debt, current maturity of long-term
   debt and capital lease obligations not subject to compromise:

   Viskase Capital Lease Obligation                                    $ 64,106       $ 72,855
   10.25% Senior Notes due 2001                                                        163,060
   Other                                                                    177            144
                                                                       --------       --------

      Total short-term debt not subject to compromise:                 $ 64,283       $236,059
                                                                       ========       ========

Current liabilities subject to compromise:

   10.25% Senior Notes                                                 $163,060
   Accrued interest                                                      25,098
   Other current liabilities                                                 40
                                                                       --------

      Total current liabilities subject to compromise:                 $188,198
                                                                       ========

Long-term debt not subject to compromise:

   Other                                                               $     85       $    194
                                                                       --------       --------

      Total long-term debt not subject to compromise                   $     85       $    194
                                                                       ========       ========
</TABLE>

10.25% Notes

On November 13, 2002, VCI filed a prepackaged Chapter 11 bankruptcy in the
Bankruptcy Court. The Chapter 11 filing is for VCI only and does not include
any of the Company's domestic or foreign subsidiaries. On December 20, 2002
the Bankruptcy Court confirmed The Plan, as modified. VCI expects to
consummate The Plan, as modified, and emerge from Chapter 11 bankruptcy in
early April, 2003.

Cash flows from operations for the Company were insufficient to pay the
Senior Notes when they matured on December 1, 2001, and accordingly the
Company did not pay the $163,060 principal and $8,357 interest that became
due at that time. In September 2001, certain of the holders of the Senior
Notes formed an Ad Hoc Committee to participate in the development of a plan
to restructure the Company's capital structure and address its future cash
flow needs. On July 15, 2002, the Company executed a restructuring agreement
with the Ad Hoc Committee for the restructuring of the Senior Notes. Under
terms of the restructuring agreement, on or about August 21, 2002 the Company
initiated an exchange offer to exchange the Senior Notes for New Notes and
shares of Preferred Stock. The proposed exchange offer was subject to
acceptance by holders of 100% of the outstanding Senior Notes, unless waived
by the Company and approved by the Ad Hoc Committee. The exchange offer was
conducted simultaneously with a solicitation for the Plan for the Company
which required the consent of a majority in number of the holders and at
least 66-2/3% in principal amount of Senior Notes actually voting in the
solicitation. Under the restructuring agreement, if less than 100% of the
outstanding Senior Notes accepted the exchange offer, but a sufficient number
of holders and aggregate amount of Senior Notes voted in favor of acceptance
of the Plan, the Company agreed to commence a voluntary Chapter 11 petition
to seek confirmation of the Plan. The Plan contains substantially the same
economic terms as the exchange offer.

<PAGE>
Although 100% of the outstanding Senior Notes did not accept the exchange
offer, the Company did receive votes to accept the Plan from approximately
91.4% of the holders and 91.4% in the outstanding principal amount that
actually voted. Accordingly, on November 13, 2002, VCI filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court
to seek confirmation of the Plan. Under Chapter 11, the Company may operate
its business in the ordinary course, subject to prior Bankruptcy Court
approval of transactions outside the ordinary course and certain other
matters.

The Chapter 11 filing was for VCI only. The Chapter 11 filing does not
include any of the Company's domestic or foreign operating subsidiaries.
Therefore, the Company's operating subsidiaries continued to provide an
uninterrupted supply of products and services to customers worldwide. Trade
creditors and vendors have been totally unaffected and continue to be paid in
the ordinary course of business, and the operating subsidiaries' employees
have been paid all wages, salaries and benefits on a timely basis.

Under the terms of the Plan, the Company's wholly owned operating subsidiary,
Viskase, will be merged with and into VCI immediately prior to or upon
consummation of the Plan with VCI being the surviving corporation. The
outstanding Senior Notes will receive New Notes and shares of new common
stock (New Common Stock) to be issued by the Company on a basis of $367.96271
principal amount of New Notes (i.e., $60,000) and 63.4122 shares of New
Common Stock (i.e., 10,340,000 shares or 94% of the New Common Stock) for
each one thousand dollar principal amount of Senior Notes. The existing
shares of common stock of the Company will be canceled. Holders of the Old
Shares will receive Warrants with a term of seven years to purchase shares of
New Common Stock equal to 2.7% of the Company's New Common Stock at an
exercise price of $10.00 per share. Assuming all Warrants are exercised,
holders of the Senior Notes would receive approximately 91.5% of the New
Common Stock and approximately 5.8% would be issued or reserved for issuance
to the Company's management and employees.

Under the proposed restructuring, 660,000 shares of New Common Stock (or upon
the request of Company management, options to purchase 660,000 shares of New
Common Stock), initially representing 6% of the New Common Stock, will be
reserved for Company management and employees. Such shares or options will be
subject to a vesting schedule with acceleration upon the occurrence of
certain events.

The New Notes would bear interest at a rate of 8% per year, and will accrue
interest from December 1, 2001, payable semi-annually (except annually with
respect to year four and quarterly with respect to year five), with interest
payable in the form of New Notes (pay-in-kind) for the first three years.
Interest for years four and five will be payable in cash to the extent of
available cash flow, as defined, and the balance in the form of New Notes
(pay-in-kind). Thereafter, interest will be payable in cash. The New Notes
would mature on December 1, 2008 with an accreted value of approximately
$89,453, assuming interest in the first 5 years is paid in the form of New
Notes (paid-in-kind).

The New Notes would be secured by a first lien on the assets of the Company,
other than the assets subject to the General Electric Capital Corporation
(GECC) lease and certain real estate, post-merger. The New Notes would be
subject to subordination of up to $25,000 principal amount for a secured
working capital credit facility for the Company.

Upon completion of the proposed restructuring the Board of Directors of the
Company would be reconstituted to consist of five members, including the
Company's Chief Executive Officer and four other persons designated by the Ad
Hoc Committee.

The Ad Hoc Committee has retained legal counsel. The fees and expenses were
paid by the Company until the commencement of the Bankruptcy.

<PAGE>
In addition, the members of the Ad Hoc Committee have agreed not to transfer
(other than to another member of the Ad Hoc Committee or an affiliate of a
member) their shares of New Common Stock for a period of two years after the
restructuring is completed. For a period of one year thereafter, the Company
would have a right of first refusal to either purchase or designate a
purchaser for shares of New Common Stock to be transferred by a member of the
Ad Hoc Committee to a person other than another member of the Ad Hoc
Committee or their affiliates.

Under Chapter 11, certain claims against VCI (the Debtor) in existence prior
to the Petition Date (November 13, 2002) were stayed while the Company
continued business operations as a debtor-in-possession. These claims are
reflected in the December 31, 2002 balance sheet as "Current liabilities
subject to compromise." As of the Petition Date, the Company stopped accruing
interest on the 10.25% Senior Notes. The interest not accrued from the
Petition Date through December 31, 2002 is $2,294.

The principal categories of claims reclassified in the Consolidated Balance
Sheets and included in Current liabilities subject to compromise are
identified below. These amounts may be subject to future adjustments
depending on Bankruptcy Court actions, further developments with respect to
disputed claims, the existence and value of any collateral securing such
claims and other events. At the Petition Date the amounts reflected below are
for the Senior Notes and accrued interest through the Petition Date.
Current liabilities subject to compromise are as follows:

<TABLE>
<CAPTION>
                                                           (in thousands)
<S>                                              <C>
   10.25% Senior Notes                                        $163,060
   Accrued interest                                             25,098
   Other current liabilities                                        40
                                                              --------
                                                              $188,198
                                                              ========
</TABLE>

Letter of Credit Facility

Letters of credit in the amount of $27,550 million were outstanding under
letter of credit facilities with commercial banks, and were cash
collateralized at December 31, 2002.

The Company finances its working capital needs through a combination of
internally generated cash from operations, cash on hand, and a revolving
credit facility that the Company anticipates that it will enter into upon
emergence from bankruptcy.

GECC

The GECC capital lease obligations were classified as current in the
financial statements due to covenant restrictions. The following lease
payment maturities conform to contractual payments under the lease:

      February 28, 2003         $18,499
      April 11, 2003            $ 5,000
      February 28, 2004         $11,750
      August 28, 2004           $11,749
      February 28, 2005         $23,500

GECC, Viskase's equipment lessor, has agreed, subject to certain conditions,
not to accelerate payment of amounts due because of any default or event of
default under any of the lease documents arising from (i) the Company's
failure to meet the Fixed Charge Coverage Ratio for the fiscal quarters
ending on March 31, 2002, June 30, 2002, September 30, 2002 and December 31,
2002 and (ii) the Company becoming a debtor under Chapter 11 of the
Bankruptcy Code until April 21, 2003. There is no agreement with GECC to
extend the forbearance beyond April 21, 2003. However, the Company and GECC
have agreed to amend certain lease documents upon the emergence from
bankruptcy. The amendment will permanently waive prior non-compliance with
the Fixed Charge Coverage Ratio and establish a new Fixed Charge
<PAGE>
Coverage Ratio for the remainder of the lease term. The amendment also changes
the February 28, 2004 lease payment with $11,750 due on February 28, 2004 and
$11,749 due on August 28, 2004.

The following is a schedule of minimum future lease payments under the GECC
capital lease obligations together with the present value of the net minimum
lease payments as of December 31, 2002. The lease payment maturities conform
to contractual payments under the lease:

<TABLE>
<CAPTION>
Year ending December
<S>                                             <C>
      2003                                              $23,499
      2004                                               23,499
      2005                                               23,500
                                                        -------
      Net minimum lease payments                         70,498
      Less: Amount representing interest                  6,392
                                                        -------
                                                        $64,106
                                                        =======
</TABLE>

Other

The fair value of the Company's debt obligation (excluding capital lease
obligations) is estimated based upon the quoted market prices for the same or
similar issues or on the current rates offered to the Company for the debt of
the same remaining maturities. At December 31, 2002, the carrying amount and
estimated fair value of debt obligations (excluding capital lease
obligations) were $163,060 and $34,243, respectively.

There were no short-term borrowings in 2002.

Aggregate maturities of debt for each of the next five years are:

<TABLE>
<CAPTION>
                                 GECC (1)           Other           Total
                                 --------           -----          -------
<S>                         <C>               <C>             <C>
            2003                 $19,306            $177           $19,483
            2004                  21,300                            21,300
            2005                  23,500                            23,500
            2006
            2007
            Thereafter                                85                85
                                 -------            ----           -------
            Total                $64,106            $262           $64,368
                                 =======            ====           =======
</TABLE>

(1)   The GECC capital lease obligations were classified as current in the
      financial statements due to covenant restrictions.

The 10.25% Senior Notes due 2001, which are classified as "Current
Liabilities Subject to Compromise", are excluded from this schedule.

9.   OPERATING LEASES (dollars in thousands)

The Company has operating lease agreements for machinery, equipment and
facilities. The majority of the facilities leases require the Company to pay
maintenance, insurance and real estate taxes.

Future minimum lease payments for operating leases that have initial or
remaining noncancelable lease terms in excess of one year as of December 31,
2002, are:
<PAGE>

      2003                                 $1,425
      2004                                  1,253
      2005                                  1,097
      2006                                    997
      2007                                    897
      Total thereafter                      2,606
                                           ------
      Total minimum lease payments         $8,275
                                           ======

Total rent expense during 2002, 2001 and 2000 amounted to $1,971, $1,682 and
$2,122, respectively.

10.   RETIREMENT PLANS

The Company and its subsidiaries have defined contribution and defined
benefit plans varying by country and subsidiary.

At December 31, 2002, the North American operations of Viskase maintained
several non-contributory defined benefit retirement plans. The Viskase plans
cover substantially all salaried and full-time hourly employees, and benefits
are based on final average compensation and years of credited service. The
Company's policy is to fund the minimum actuarially computed annual
contribution required under the Employee Retirement Income Security Act of
1974 (ERISA).

The Company recognized a minimum pension liability adjustment which is due to
changes in plan return assumptions and asset performance (see Note 20
Comprehensive (Loss)).

PENSIONS AND OTHER POSTRETIREMENT BENEFITS PLANS - NORTH AMERICA (dollars in
thousands):
<TABLE>
<CAPTION>

                                                             Pension Benefits               Other Benefits
                                                          ----------------------        -----------------------
                                                            2002           2001           2002           2001
                                                          --------       --------       --------       --------
<S>                                                    <C>            <C>            <C>            <C>

ACCUMULATED BENEFIT OBLIGATION (ABO)                      $102,190       $ 93,215

CHANGE IN BENEFIT OBLIGATION

Projected benefit obligation at beginning of year         $107,251       $103,641       $44,615        $41,404
Service cost                                                 1,924          1,806           777            762
Interest cost                                                7,521          7,347         3,270          3,021
Actuarial losses                                             5,711          1,946         4,481          1,458
Benefits paid                                               (7,275)        (7,136)       (2,322)        (1,877)
Plan amendment                                                  (4)
Translation                                                     58           (353)           25           (153)
                                                          ---------      ---------      ---------      ---------
Estimated benefit obligation at end of year               $115,186       $107,251       $50,846        $44,615
                                                          =========      =========      ========       ========

CHANGE IN PLAN ASSETS

Fair value of plan assets at beginning of year            $ 89,058       $ 98,687       $              $
Actual return on plan assets                                (7,888)        (6,308)
Employer contribution                                        1,164          4,162         2,322          1,877
Benefits paid                                               (7,275)        (7,136)       (2,322)        (1,877)
Translation                                                    56           (347)
                                                          -------        --------       --------       --------
Estimated fair value of plan assets at end of year        $75,115        $89,058        $      0       $      0
                                                          =======        =======        ========       ========

RECONCILIATION OF ACCRUED BENEFIT
COST, AT YEAR END

Funded status                                             $(40,071)      $(18,193)      $(50,846)      $(44,615)
Unrecognized net loss                                       33,940         13,117          9,236          5,118
Unrecognized prior service cost                                437            499
                                                          ---------      ---------      ---------      ---------
(Accrued) benefit cost                                    $ (5,694)      $ (4,577)      $(41,610)      $(39,497)
                                                          =========      =========      =========      =========
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                             Pension Benefits               Other Benefits
                                                          ----------------------        -----------------------
                                                            2002           2001           2002           2001
                                                          --------       --------       --------       --------
<S>                                                    <C>            <C>            <C>            <C>

AMOUNTS RECOGNIZED IN STATEMENT OF
   FINANCIAL POSITION

Prepaid benefit cost                                      $     29
Accrued benefit liability                                  (32,806)      $(10,134)
Intangible asset                                               338            385
Accumulated other comprehensive loss                        26,745          5,172
                                                          --------       ----------
Net amount recognized                                     $ (5,694)      $ (4,577)
                                                          ========       ==========

WEIGHTED AVERAGE ASSUMPTIONS
   AS OF END OF YEAR

Discount rate                                                 6.75%          7.22%          6.73%          7.23%
Expected return on plan assets                                8.89%          8.81%
Rate of compensation increase                                 3.75%          4.25%
</TABLE>

For measurement purposes, a 7.5% and 10.0% annual rate of increase in the per
capita cost of covered health care benefits was assumed in 2002 for the U.S.
and Canadian plans, respectively. The rates were assumed to decrease to 6.5%
in 2004 for the U.S. plan and gradually decrease to 5% through 2007 for the
Canadian plan. The expected return of pension plan assets in 2002 increased
over the prior year because the actual return on Canadian pension plan
assets, which were annuitized, was higher than the rate in 2001.

<TABLE>
<CAPTION>
                                                         Pension Benefits                   Other Benefits
                                                  ------------------------------         ------------------------------
                                                  2002         2001         2000         2002         2001         2000
                                                  ----         ----         ----         ----         ----         ----
<S>                                        <C>            <C>          <C>         <C>          <C>          <C>
COMPONENTS OF NET PERIODIC BENEFIT COST

Service cost                                    $1,924       $1,806       $2,888       $  777       $  762       $  971
Interest cost                                    7,522        7,347        7,347        3,270        3,021        3,106
Expected return on plan assets                  (7,686)      (8,627)      (8,541)
Amortization of net pension obligation                                        33
Amortization of prior service cost                  56           67          126                                     53
Amortization of actuarial (gain) loss              463           91         (119)         363          136          443
                                                ------       ------       -------      ------       ------       ------
Net periodic benefit cost                        2,279          684        1,734        4,410        3,919        4,573
FAS No. 88 curtailment (gain) loss                                          (950)                                   597
                                                                          -------                                ------
Total net periodic benefit cost                 $2,279       $  684       $  784       $4,410       $3,919       $5,170
                                                ======       ======       ======       ======       ======       ======
</TABLE>

Assumed healthcare cost trend rates have a significant effect on the amounts
reported for healthcare plans. A one-percentage point change in assumed
healthcare cost trend rates would have the following effects:
<PAGE>
<TABLE>
<CAPTION>
                                                                    Other Benefits
                                                                   -----------------
                                                                   2002         2001
                                                                   ----         ----
<S>                                                           <C>          <C>
Effect of 1% change in medical trend cost:

Based on a 1% increase
   Change in accumulated postretirement benefit obligation        $2,272       $2,018
   Change in service cost and interest                               179          162

Based on a 1% decrease
   Change in accumulated postretirement benefit obligation        (2,593)      (2,311)
   Change in service cost and interest                              (207)        (190)
</TABLE>

SAVINGS PLANS (dollars in thousands):

The Company also has defined contribution savings and similar plans, which
vary by subsidiary, and, accordingly, are available to substantially all
full-time United States employees not covered by collective bargaining
agreements. The defined contribution savings plans allow employees to choose
among various investment alternatives. The Company's aggregate contributions
to these plans are based on eligible employee contributions and certain other
factors. The Company expense for these plans was $754, $762 and $1,158 in
2002, 2001 and 2000, respectively.

INTERNATIONAL PLANS (dollars in thousands):

The Company maintains various pension and statutory separation pay plans for
its European employees. The expense for these plans in 2002, 2001 and 2000
was $42, $301 and $202, respectively. As of their most recent valuation
dates, in plans where vested benefits exceeded plan assets, the actuarially
computed value of vested benefits exceeded those plans' assets by
approximately $2,748.

11.   RESTRUCTURING CHARGES

During the second quarter of 2002, the Company committed to a restructuring
plan to address the industry's competitive environment. The plan resulted in
a before tax charge of $3.2 million. Approximately 2% of the Company's
worldwide workforce was laid off due to the 2002 restructuring plan. In
connection with the restructuring, the Company wrote off the remaining net
book value of the Nucel(r) equipment and the costs associated with the
decommissioning of this equipment. The Company also reversed an excess
reserve of $9.3 million for Nucel(r) technology third party license fees that
had been renegotiated during the second quarter of 2002. The Nucel(r)
technology license fees were originally reflected in the 2000 restructuring
reserve.

In the fourth quarter of 2002 and the year-to-date period, the Company paid
third party license fees of approximately $.6 million and $2.3 million,
respectively. The renegotiated Nucel(r) technology third party license fee
payments remaining are estimated at $.9 million, $.4 million, $.2 million,
$.2 million and $.5 million for the year periods 2003 to 2007 and are
included in the 2000 restructuring reserve.

<PAGE>
2002 Restructuring

<TABLE>
<CAPTION>
                                                                                     2002
                                                                                 Restructuring
                                                                                    Reserve
                                                                                     as of
                                                 2002                   Write-     December
                                                Charge     Payments     down       31, 2002
                                                ------     --------     -----    -------------
<S>                                         <C>        <C>          <C>         <C>
   Employee costs                                $1.4       $(.9)                    $.5
   Nucel(r) equipment                             1.0                  $(1.0)
   Decommissioning                                 .8        (.7)                     .1
                                                 -----     ------     ------         ---
      Total restructuring charge                 $3.2      $(1.6)      $(1.0)         $.6
                                                           ======      ======         ===
   Reversal of 2000 excess reserve               (9.3)
                                                ------
      Restructuring (income)                    $(6.1)
                                                ======
</TABLE>

2000 Restructuring

The following table provides details of the 2000 restructuring reserve for
the year ended December 31, 2002:

<TABLE>
<CAPTION>
                                             2000                                             2000
                                         Restructuring                                  Restructuring
                                            Reserve                                         Reserve
                                             as of                                           as of
                                           December                      Other              December
                                           31, 2001        Payments     Adjustments        31, 2002
                                         -------------     --------     -----------     --------------
<S>                                  <C>               <C>           <C>              <C>
   Employee costs                             $1.0           $(1.0)
   Nucel(r) license fees                      13.8            (2.3)         $(9.3)             $2.2
   Decommissioning                              .3             (.2)                              .1
                                             -----           -----          ------             ----
      Total restructuring reserve            $15.1           $(3.5)         $(9.3)             $2.3
                                             =====           ======         ======             ====
</TABLE>

The following table provides details of the 2000 restructuring reserve for
the year ended December 31, 2001:

<TABLE>
<CAPTION>
                                            2000                                             2000
                                         Restructuring                                  Restructuring
                                           Reserve                                         Reserve
                                            as of                                           as of
                                          December                          Other          December
                                          31, 2000         Payments      Adjustments       31, 2001
                                         -------------     --------     -------------   --------------
<S>                                 <C>                 <C>          <C>             <C>
   Employee costs                            $11.2           $(9.8)         $(.4)              $1.0
   Nucel(r) license fees                      15.3            (1.6)           .1               13.8
   Decommissioning                              .6             (.3)           .0                 .3
                                             -----           ------         -----             -----
      Total restructuring reserve            $27.1          $(11.7)         $(.3)             $15.1
                                             =====          =======         =====             =====
</TABLE>

<PAGE>
The following table provides details of the 2000 restructuring reserve for
the year ended December 31, 2000:

<TABLE>
<CAPTION>
                                                                                             Year
                                            2000                   Write-      Other         Ending
                                           Charge     Payments     down     Adjustments      2000
                                           ------     --------     ------   -----------      ------
<S>                                     <C>         <C>         <C>          <C>          <C>
   Employee costs                          $13.4       $(2.1)                   $(0.1)       $11.2
   Write-down of building and equipment     13.4                   $(13.4)
   Nucel(r) building and equipment          42.4                    (42.4)
   Nucel(r) other                           24.2        (3.0)                    (5.9)        15.3
   Decommissioning                           2.3        (0.1)                    (1.6)         0.6
                                           -----       ------      -------      ------       -----
      Total restructuring charge           $95.7       $(5.2)      $(55.8)      $(7.6)       $27.1
                                                       ======      =======      ======       =====
   Reversal of excess reserve                (.8)
                                           ------
      Restructuring charge                 $94.9
                                           ======
</TABLE>

Approximately 15% of the Company's worldwide workforce was laid off due to
the 2000 restructuring plan.

During 2001, the Company incurred a restructuring charge of $4.8 million
for the write-down of facilities held for sale. These facilities are
included in property held for sale (see Note 5).

12.   DISCONTINUED OPERATIONS (dollars in thousands)

On January 17, 2000, the Company's Board of Directors announced its intent
to sell the Company's plastic barrier and non-barrier shrink Films
Business. The sale of the Films Business was completed on August 31, 2000.
The aggregate proceeds of approximately $255,000, including a Working
Capital Adjustment of $10,300, were used to retire debt, pay GECC and for
general corporate purposes. The Company recognized a net gain in the amount
of $3,189 in 2001 and $68,185 in 2000. The business sold included
production facilities in the United States, United Kingdom, and Brazil. In
conjunction with the sale of the Films Business, the Company shut down its
oriented polypropylene (OPP) films business located in Newton Aycliffe,
England and the films operation in Canada; the costs of these are included
in the business discontinuance.

The operating results of the Films Business have been segregated from
continuing operations and reported as a separate line item on the income
statement under the heading Discontinued Operations.

<PAGE>
Operating results from discontinued operations for 2000 are:

<TABLE>
<CAPTION>
                                                      Year Ended
                                                  December 31, 2000
                                                  -----------------
<S>                                               <C>
Net sales                                             $110,017

Costs and expenses
   Cost of sales                                        83,502
   Selling, general and administrative                  19,096
   Amortization of intangibles                           2,000
                                                      --------

Operating income                                         5,419

   Interest income                                          19
   Interest expense                                         98
   Other expense, net                                    1,608
                                                      --------

Income from discontinued
   operations before taxes                               3,732
   Income tax provision                                    297
                                                      --------

Net income from discontinued
   operations                                         $  3,435
                                                      ========
</TABLE>

13.   INCOME TAXES (dollars in thousands)

<TABLE>
<CAPTION>
                                                 2002            2001           2000
                                                 ----            ----           ----
<S>                                        <C>             <C>            <C>
Pre-tax (loss) from continuing operations
   consisted of:
   Domestic                                   $(18,417)       $(28,353)      $(70,065)
   Foreign                                      (2,210)        (11,869)       (25,174)
                                              ---------       ---------      ---------
      Total                                   $(20,627)       $(40,222)      $(95,239)
                                              =========       =========      =========
</TABLE>

The provision (benefit) for income taxes from continuing operations
consisted of:

<TABLE>
<CAPTION>
                                                 2002            2001          2000
                                                 ----            ----          ----
<S>                                        <C>             <C>            <C>
Current:
   Federal                                     $(2,145)
   Foreign                                       1,530         $(2,810)        $728
   State                                            36             138
                                               --------        --------        ----
      Total current                               (579)         (2,672)         728

Deferred:
   Federal
   Foreign                                        (718)           (698)
   State
                                               --------        --------        ----
      Total deferred                              (718)           (698)
                                               --------        --------        ----
      Total                                    $(1,297)        $(3,370)        $728
                                               ========        ========        ====
</TABLE>

<PAGE>
The total provision (benefit) for income taxes was allocated to the
following categories:

<TABLE>
<CAPTION>
                                                 2002            2001          2000
                                                 ----            ----          ----
<S>                                        <C>             <C>            <C>

Continuing operations                          $(1,297)        $(3,370)      $  728
Income from discontinued operations                                             297
Gain on sale from discontinued operations                                     6,633
Extraordinary gain                                                              633
                                               --------        --------      ------
   Total income tax provision (benefit)        $(1,297)        $(3,370)      $8,291
</TABLE>

A reconciliation from the statutory federal tax rate to the
effective tax rate for continuing operations follows:

<TABLE>
<CAPTION>
                                                 2002            2001          2000
                                                 ----            ----          ----
<S>                                                 <C>         <C>         <C>

Statutory federal tax rate                               35.00%      35.00%      35.00%
Increase (decrease) in tax rate due to:
   State and local taxes net of
      related federal tax benefit                         (.17)       (.34)
   Net effect of taxes relating to
      foreign operations                                 (2.03)      (1.61)     (10.02)
   Reversal of overaccrued taxes                                                (25.74)
   Valuation allowance changes and other                (26.50)     (24.67)
                                                        -------     -------     -------
      Effective tax rate from continuing operations       6.30%       8.38%       (.76)%
                                                        =======     =======     ========
</TABLE>

Temporary differences and carryforwards which give rise to a
significant portion of deferred tax assets and liabilities for
2002 and 2001 are as follows:

<TABLE>
<CAPTION>
                                                                    Year 2002
                                         ---------------------------------------------------------------
                                              Temporary Difference                  Tax Effected
                                         -----------------------------     -----------------------------
                                         Deferred Tax     Deferred Tax     Deferred Tax     Deferred Tax
                                            Assets         Liabilities        Assets         Liabilities
<S>                                    <C>              <C>              <C>              <C>
Depreciation basis differences                              $ 57,415                          $ 22,392
Inventory basis differences                                    4,609                             1,798
Intangible basis differences                                   2,000                               780
Lease transaction                          $ 64,105                          $ 25,001
Pension and healthcare                       47,955                            18,702
Employee benefits accruals                    6,006                             2,342
Loss and other carryforwards                 56,875                            22,181
AMT carryover                                 9,749                             3,412
Restructuring reserve                        20,510                             7,999
Self insurance accruals and reserves          3,354                             1,308
Other accruals and reserves                     551                               216
Foreign exchange and other                                    23,526                             9,175
Valuation allowances                                         187,407                            73,089
                                           --------         --------         --------         --------
                                           $209,105         $274,957         $ 81,161         $107,234
                                           ========         ========         ========         ========
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                                    Year 2001
                                         ---------------------------------------------------------------
                                              Temporary Difference                  Tax Effected
                                         -----------------------------     -----------------------------
                                         Deferred Tax     Deferred Tax     Deferred Tax     Deferred Tax
                                            Assets         Liabilities        Assets         Liabilities
<S>                                    <C>              <C>              <C>              <C>
Depreciation basis differences             $                $ 65,954         $                $ 25,722
Inventory basis differences                                    4,110                             1,603
Intangible basis differences                                   4,000                             1,560
Lease transaction                            72,855                            28,413
Pension and healthcare                       42,262                            16,482
Employee benefits accruals                    5,715                             2,229
Loss and other carryforwards                 26,175                            10,208
AMT carryover                                15,877                             5,557
Restructuring reserve                        42,123                            16,428
Self insurance accruals and reserves          1,434                               559
Other accruals and reserves                      15                                 6
Foreign exchange and other                                    25,088                             9,784
Valuation allowances                                         174,202                            67,939
                                           --------         --------         --------         --------
                                           $206,456         $273,354         $ 79,882         $106,608
</TABLE>

At December 31, 2002, the Company had federal income tax net operating loss
carryforwards of approximately $56,875 which had been substantially offset
by a valuation allowance. In addition, at December 31, 2002 and December
31, 2001, the Company had alternative minimum tax credit carryforwards of
$3,412 and $5,557, respectively. The Company received an income tax refund
of $2,145 resulting from the Job Creation Act enacted in March 2002.
Alternative minimum tax credits have an indefinite carryforward period.
Significant limitations on the utilization of the net operating loss
carryforwards and the alternative minimum tax credit carryforwards exist
under federal income tax rules.

The Company joins in filing a United States consolidated federal income tax
return including all of its domestic subsidiaries.

14.   COMMITMENTS (dollars in thousands)

As of December 31, 2002 and 2001, the Company had capital expenditure
commitments outstanding of approximately $332 and $642, respectively.

15.   PATENT INFRINGEMENT SETTLEMENT INCOME (dollars in thousands)

In late 1993, Viskase commenced a legal action against ANC in Federal
District Court for the Northern District of Illinois, Eastern Division,
93C7651 (ANC Litigation). Viskase claimed that ANC's use of two different
very low density polyethylene plastic resins in the manufacture of ANC's
multi-layer barrier shrink film products was infringing various Viskase
patents relating to multi-layer barrier plastic films used for fresh red
meat, processed meat and poultry product applications. In November 1996,
after a three-week trial, a jury found that ANC had willfully infringed
Viskase's patents and awarded Viskase $102,400 in compensatory damages. The
Court also entered an order permanently enjoining ANC from making or
selling infringing products.

On September 29, 2000, the Company and Viskase entered into a Settlement
and License Agreement (Agreement) with ANC, Pechiney Plastic Packaging,
Inc. and Pechiney Emballage Flexible Europe (collectively, "Pechiney")
partially resolving the ANC Litigation. Pursuant to the Agreement, Viskase
received a payment of $54,750 on October 2, 2000. In addition, an
additional payment of $60,250 would have been made to Viskase if the United
States Court of Appeals for the Federal Circuit had affirmed the monetary
award in its entirety in the ANC Litigation. The Company recorded $54,750
as patent infringement settlement income during the third quarter 2000 and
expensed $7,850 patent defense costs.

<PAGE>
On July 31, 2001, the Court of Appeals affirmed the lower court's decision
in part, reversed the decision in part and remanded the case back to the
District Court for the Northern District of Illinois. Under the Agreement,
Viskase Corporation was paid $54,750 in partial settlement and agreed not
to pursue the patent litigation further if the monetary damages award was
not affirmed in its entirety. Because the monetary damages were not
affirmed in its entirety, Viskase Corporation will not receive any
additional payments under the agreement and no further legal proceedings
will take place. The patents, which were the subject of the ANC Litigation,
were part of the Company's Films Business which was sold in August 2000.

16.   CONTINGENCIES

In 1988, Viskase Canada Inc. (Viskase Canada), a subsidiary of the Company,
commenced a lawsuit against Union Carbide Canada Limited and Union Carbide
Corporation in the Ontario Superior Court of Justice, Court File No.:
292270188 seeking damages resulting from Union Carbide's breach of
environmental representations and warranties under the Amended and Restated
Purchase and Sale Agreement, dated January 31, 1986 (Agreement). Pursuant
to the Agreement, Viskase Corporation and various affiliates (including
Viskase Canada) purchased from Union Carbide and Union Carbide Films
Packaging, Inc., its cellulosic casings business and plastic barrier films
business (Business), which purchase included a facility in Lindsay,
Ontario, Canada (Site). Viskase Canada is claiming that Union Carbide
breached several representations and warranties and deliberately failed to
disclose to Viskase Canada the existence of contamination on the Site.

In October 2001, the Canadian Ministry of the Environment (MOE) notified
Viskase Canada that it had evidence to suggest that the Site was a source
of polychlorinated biphenyl (PCB) contamination. Viskase Canada is working
with the MOE in investigating the alleged PCB contamination and developing
and implementing, if appropriate, a remedial plan for the Site. Viskase
Canada has been advised by the MOE that the MOE expects to issue certain
Director's Orders requiring remediation under applicable environmental
legislation against Viskase Canada and others in the next few months.
Viskase Canada has been granted leave to amend its lawsuit against Union
Carbide to allege that any PCB contamination at or around the Site was
generated from Union Carbide's plastics extrusion business, which was
operated at the Site by Union Carbide prior to the purchase of the
Business. Union Carbide's plastics extrusion business was not part of the
Business purchased by Viskase Corporation and its affiliates. Viskase
Canada expects to amend the lawsuit prior to June 1, 2003. Viskase Canada
will be asking the court to require Union Carbide to repurchase the Site
from Viskase Canada and award Viskase Canada damages in excess of $2.0
million (Canadian). The Company has reserved $.5 million (U.S.) for the
property remediation. The lawsuit is still pending and is expected to
proceed to trial sometime during the second half of 2004.

In August 2001, the Department of Revenue of the Province of Quebec, Canada
issued an assessment against Viskase Canada in the amount of $2,669,501.48
(Canadian) plus interest and possible penalties. This assessment is based
upon Viskase Canada's failure to collect and remit sales tax during the
period July 1, 1997 to May 31, 2001. During this period Viskase Canada did
not collect and remit sales tax in Quebec on reliance of the written advice
of its outside accounting firm. Viskase Canada filed a Notice of Objection
in November 2001 with supplementary submission in October 2002. No decision
has been made on the Notice of Objection. The ultimate liability for the
Quebec sales tax lies with the customers of Viskase Canada during the
relevant period. The Company has, however, provided for a reserve of $.3
million (U.S.) for interest and penalties, if any. Viskase Canada is
negotiating with the Quebec Department of Ministry to avoid having to
collect the sales tax from customers who will then be entitled to credit
for such sales tax collected.

<PAGE>
In March 1997, Viskase received a subpoena from the Antitrust Division of
the United States Department of Justice (DOJ) relating to a grand jury
investigation of the sausage casings industry. In September 1999, Viskase
received a subpoena from the DOJ relating to the expansion of the grand
jury investigation into the specialty plastic films industry. During
October 2002, Viskase was advised by the DOJ that it has closed the
investigation of the sausage casings and specialty plastic films industries
and that no action will be taken.

During 1999 and 2000, the Company and certain of its subsidiaries and one
other sausage casings manufacturer were named in ten virtually identical
civil complaints filed in the United States District Court for the District
of New Jersey by the following plaintiffs: Smith Provision Co., Inc.; Parks
LLC (d/b/a Parks Sausage Company); Real Kosher Sausage Company, Inc.;
Sahlen Packing Co., Inc.; Marathon Enterprises, Inc.; Ventures East, Inc.;
Keniston's, Inc.; Smithfield Foods, Inc.; Clougherty Packing Co.; and
Klement Sausage Co. The District Circuit ordered all of these cases
consolidated in Civil Action No. 99-5195-MLC (D.N.J.). Each complaint
brought on behalf of a purported class of sausage casings customers alleges
that the defendants unlawfully conspired to fix prices and allocate
business in the sausage casings industry. In 2001, all of the consolidated
cases were transferred to the United States District Court for the Northern
District of Illinois, Eastern Division. The Company strongly denies the
allegations set forth in these complaints and intends to vigorously defend
these claims.

In February 2003, the plaintiffs (other than Marathon Enterprises, Inc.
which has elected not to pursue its lawsuit against the Company) amended
their complaint to eliminate any claim against the Company that arose prior
to December 17, 1993. In March 2003, the Company filed a Motion to Dismiss
the amended complaint.

The Company and its subsidiaries are involved in these and various other
legal proceedings arising out of their business and other environmental
matters, none of which is expected to have a material adverse effect upon
results of operations, cash flows or financial condition.

17.   CAPITAL STOCK AND PAID IN CAPITAL

Authorized shares of preferred stock ($.01 par value per share) and common
stock ($.01 par value per share) for the Company are 25,000,000 shares and
50,000,000 shares, respectively. A total of 15,314,562 shares of common
stock were issued and outstanding as of December 31, 2002.

The Company issued 116,025 shares of stock to its employees in 2000 to
celebrate its 75-year anniversary. The shares issued have been recorded at
fair market value on the date of grant with a corresponding charge to
stockholders' equity for the unearned portion of the award. The fair market
value at the date of grant was approximately $300 thousand. The unearned
portion is amortized as compensation expense on a straight line basis over
the related vesting period. Compensation expense related to the plan
totaled $99 thousand, $105 thousand and $18 thousand in 2002, 2001 and
2000, respectively. The shares issued under this plan are subject to
forfeiture until October 27, 2003.

On June 26, 1996, the Board of Directors adopted a Stockholder Rights Plan.
Under the Stockholder Rights Plan, the Board declared a dividend of one
Common Stock Purchase Right (Right) for each outstanding common share of
the Company. Rights were issued to the stockholders of record on June 26,
1996. The Rights are attached to and automatically trade with the
outstanding shares of the Company's common stock.

<PAGE>
Under the Stockholder Rights Plan, through April 19, 2003, if any person
acquires 41% or more of the Company's Common Stock, other than pursuant to
a tender or exchange offer for all outstanding shares of the Company
approved by a majority of the independent directors not affiliated with a
41%-or-more stockholder, after receiving advice from one or more investment
banking firms, each Right not owned by a 41%-or-more stockholder would
automatically, without any further action of the Board of Directors, be
exchanged for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right simultaneous with any person becoming a 41% or more
stockholder. Rights may be redeemed at a price of $0.001 per Right at any
time prior to their expiration on June 26, 2006. The Rights Plan will
terminate on the Effective Date.

18.   EARNINGS PER SHARE (dollars in thousands)

Following are the reconciliations of the numerators and denominators of the
basic and diluted EPS.

<TABLE>
<CAPTION>
                                                                 Years Ended December 31
                                                     ----------------------------------------------
                                                          2002             2001             2000
                                                          ----             ----             ----
<S>                                              <C>               <C>               <C>
Numerator:

(Loss) available to common stockholders:

From continuing operations                             $(19,330)        $(36,852)        $(95,967)

Discontinued operations net of income taxes:
      Income from discontinued operations                                                   3,435
      Gain on disposal                                                     3,189           68,185
                                                       ---------        ---------        ---------
(Loss) before extraordinary item                        (19,330)         (33,663)         (24,347)

      Extraordinary gain, net of income taxes:                             8,137            6,511
                                                       ---------        ---------        ---------


Net loss available to common stockholders
   for basic and diluted EPS                           $(19,330)        $(25,526)        $(17,836)
a                                                       =========        =========        =========

Denominator:

Weighted average shares outstanding
   for basic EPS                                     15,316,183       15,309,616       15,126,670

Effect of dilutive securities
                                                     -----------      -----------      -----------

Weighted average shares outstanding
   for diluted EPS                                   15,316,183       15,309,616       15,126,670
                                                     ===========      ===========      ===========
</TABLE>

Common stock equivalents are excluded from the loss-per-share calculations,
as the result is anti-dilutive.

19.   STOCK-BASED COMPENSATION (dollars in thousands)

The Company maintains a stock option plan. The plan provides for the
granting of incentive and nonqualified stock options to employees,
officers, and directors. Stock options have been granted at prices at or
above the fair market value on the date of grant. Options generally vest in
three equal installments beginning one year from the grant date and expire
ten years from the grant date. Non-employee director options, however, vest
on the date of grant. The options are subject to acceleration upon the
occurrence of certain events. Such an acceleration event occurred in March
2001. No compensation expense resulted from this event.

<PAGE>
The Company accounts for these plans under Accounting Principles Board
Opinion 25, "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations. Accordingly, compensation expense is recognized using the
intrinsic value-based method for options granted under the plans.
Compensation expense associated with these plans has not been recognized to
date in accordance with APB 25. The Company has adopted only the disclosure
provisions required by SFAS No. 148, "Accounting for Stock Based
Compensation - Transition and Disclosure."

A summary of the Company's stock option activity during the years ended
December 31, 2002, 2001 and 2000 is presented below:

<TABLE>
<CAPTION>
                                        2002                          2001                          2000
                              ----------------------       ----------------------        ----------------------
                              Weighted                     Weighted                      Weighted
                               Average      Exercise        Average      Exercise         Average      Exercise
                               Shares        Price          Shares        Price           Shares        Price
                              --------      --------       --------      --------        --------      --------
<S>                        <C>            <C>           <C>             <C>          <C>             <C>
Outstanding at
   beginning of year           871,930        $2.68         945,710         $2.83         646,760         $4.19
Granted                              0                        7,000          1.78         550,000          1.78
Exercised                            0
Forfeited                      (36,500)        1.95         (80,780)         4.35        (251,050)         4.04
                               --------                     --------                     ----------
Outstanding at
   year end                    835,430         2.71         871,930          2.68         945,710         $2.83
                               ========                     ========                     ==========

Options exercisable
   at year end                 835,430         2.71         871,930         $2.68         344,389         $4.28
                               ========                     ========                     ==========

Future option grants
   available at year end       449,898                      413,398                       339,618
                               ========                     ========                     ==========
</TABLE>

As of December 31, 2002, total stock options outstanding have a weighted-
average remaining contractual life of 6.41 years. The exercise price of
options outstanding as of December 31, 2002 ranged from $1.78 to $7.25.
There were no option grants in 2002. The weighted average grant date fair
value of options granted during years 2001 and 2000 was $1.68 and $1.45,
respectively. These options will be canceled under the Plan.

The fair value of each option granted is estimated on the date of grant
using the Black-Scholes option pricing model with the following
assumptions: (1) expected volatility of 0% in 2002, 181.31% in 2001, and
138.8% in 2000, (2) risk-free interest rate equaling the 5-year treasury
yield on the grant date was 0% in 2002, 4.65% in 2001 and 5.69% to 5.97% in
2000, and (3) the expected life of 5 years in 2002, 2001 and 2000. There
were no option grants in 2002. The Company has never declared dividends,
nor does it currently expect to declare dividends in the foreseeable
future.

The Company also has a stock compensation plan for the non-employee
directors of the Company that was approved during fiscal 1996. These
directors may elect to receive directors fees in the form of common stock
of the Company based upon the average market price of the Company's Common
Stock on the grant date. Under this plan, 46,723 shares were issued at
$1.38 during 2001 and 44,302 shares were issued at $2.29 during 2000,
respectively. The shares issued under this plan will be converted into
Warrants upon the Effective Date.

<PAGE>
The Company issued shares of stock to its employees to celebrate its 75-
year anniversary. The shares issued have been recorded at fair market value
on the date of grant with a corresponding charge to stockholders' equity
for the unearned portion of the award. The fair market value at the date of
grant is approximately $300 thousand. The unearned portion is amortized as
compensation expense on a straight line basis over the related vesting
period. Compensation expense related to the plan totaled $99 thousand, $105
thousand and $18 thousand in 2002, 2001 and 2000, respectively. The shares
issued under this plan are subject to forfeiture until October 27, 2003.
The Diamond Anniversary Shares will be converted into Warrants upon
emergence from bankruptcy.

20.   COMPREHENSIVE (LOSS) (in thousands)

The following sets forth the changes in the components of other
comprehensive income (loss) and the related income tax (benefit) provision:

<TABLE>
<CAPTION>
                                                                            Years Ended
                                                           ----------------------------------------------
                                                           December 31,     December 31,     December 31,
                                                               2002             2001             2000
                                                           ------------     ------------     ------------
<S>                                                    <C>              <C>              <C>
Other comprehensive income (loss):
   Foreign currency translation
      Adjustment (1)                                       $  3,711         $  (129)          $(2,730)
         Less reclassification of foreign currency
         translation adjustment for
         discontinued operations (2)                                                            2,532
   Minimum pension liability adjustment (3)                 (21,573)         (5,172)
                                                           ---------        --------          --------
Other comprehensive (loss), net of tax                     $(17,862)        $(5,301)          $  (198)
                                                           =========        ========          ========
</TABLE>

(1)   Foreign currency translation adjustments, net of related tax
      (benefit) of $0, $0 and $(1,746) for the years ended 2002, 2001 and
      2000, respectively.

(2)   Reclassification adjustment for losses due to sale of Films Business,
      included in net (loss) of $4,151, net of related tax provision of
      $1,619.

(3)   Minimum pension liability adjustment, net of a related tax provision
      of $0 in 2002 and 2001, respectively. The minimum pension liability
      adjustment is due to changes in plan return assumptions and asset
      performance.

21.   FAIR VALUE OF FINANCIAL INSTRUMENTS (dollars in thousands)

The following table presents the carrying value and estimated fair value as
of December 31, 2002 of the Company's financial instruments. (Refer to
Notes 2 and 8.)

<TABLE>
<CAPTION>
                                                  Carrying        Estimated
                                                    Value        Fair Value
                                                  --------       ----------
<S>                                          <C>             <C>
Assets:
   Cash and cash equivalents                       $27,700         $27,700
   Restricted cash                                  28,347          28,347

Liabilities:
   Current liabilities subject to compromise      $163,060         $34,243
</TABLE>

22.   RESEARCH AND DEVELOPMENT COSTS (dollars in thousands)

Research and development costs from continuing operations are expensed as
incurred and totaled $4,070, $4,837 and $5,474 for 2002, 2001 and 2000,
respectively.

<PAGE>
23.   RELATED PARTY TRANSACTIONS (dollars in thousands)

During 2002, 2001 and 2000, the Company purchased product in the ordinary
course of business and on arm's-length terms from affiliates of DPK in the
amounts of approximately $321, $377 and $444, respectively. Donald P.
Kelly, a beneficial owner of greater than 5% of the Common Stock, and Mr.
Gustafson, a beneficial owner of greater than 5% of the outstanding Common
Stock and the Chairman, Chief Executive Officer and President of the
Company, are executive officers and limited partners of DPK.

During years 2002, 2001 and 2000, Viskase had sales of $592, $689 and
$23,229, respectively, to Cargill, Inc. and its affiliates. The majority of
sales to Cargill, Inc. were related to the Films Business which was sold in
August 2000. Such sales were made in the ordinary course of business.
Gregory R. Page, President and Chief Operating Officer of Cargill, Inc.,
will resign as a director of the Company as of the Effective Date.

24.   BUSINESS SEGMENT INFORMATION AND GEOGRAPHIC AREA INFORMATION (dollars
      in thousands)

The Company primarily manufactures and sells cellulosic food casings. The
Company's operations are primarily in North America, South America and
Europe. Intercompany sales and charges (including royalties) have been
reflected as appropriate in the following information. Certain items are
maintained at the Company's corporate headquarters and are not allocated to
the segments. They include most of the Company's debt and related interest
expense and income tax benefits. Other expense for 2002, 2001 and 2000
includes net foreign exchange transaction gains (losses) of approximately
$1,659, $(2,309) and $(4,171), respectively.

Business Segment Information

<TABLE>
<CAPTION>
                                                   Years Ended December 31
                                          ----------------------------------------
                                            2002            2001            2000
                                            ----            ----            ----
<S>                                   <C>             <C>             <C>
Net sales:
   Casings - Continuing operations        $183,577        $189,315        $200,142
   Films - Discontinued operations                                         110,017
                                          --------        --------        --------
                                          $183,577        $189,315        $310,159
                                          ========        ========        ========
Operating income (loss):
   Casings - Continuing operations        $  2,342        $(13,736)       $(93,702)
   Films - Discontinued operations                                           5,419
                                          --------        --------        --------
                                          $  2,342        $(13,736)       $(88,283)
                                          ========        ========        ========
Identifiable assets:
   Casings - Continuing operations        $218,681        $234,028        $322,364
   Films - Discontinued operations                                         146,318
                                          --------        --------        --------
                                          $218,681        $234,028        $468,682
                                          ========        ========        ========
Depreciation and amortization:
   Casings - Continuing operations        $ 22,959        $ 23,125        $ 25,012
   Films - Discontinued operations                                           9,415
                                          --------        --------        --------
                                          $ 22,959        $ 23,125        $ 34,427
                                          ========        ========        ========
Capital expenditures:
   Casings - Continuing operations        $  3,824        $  5,882        $ 12,350
   Films - Discontinued operations                                           1,385
                                          --------        --------        --------
                                          $  3,824        $  5,882        $ 13,735
                                          ========        ========        ========
</TABLE>
<PAGE>
Geographic Area Information

<TABLE>
<CAPTION>
                                                   Years Ended December 31
                                          ----------------------------------------
                                            2002            2001            2000
                                            ----            ----            ----
<S>                                   <C>             <C>             <C>
Net sales:
   North America                          $122,648        $128,488        $202,362
   South America                             7,424           7,861          25,025
   Europe                                   66,458          70,058         100,885
   Other and eliminations                  (12,953)        (17,092)        (18,113)
                                          ---------       ---------       ---------
                                          $183,577        $189,315        $310,159
                                          ========        ========        ========
Operating (loss) income:
   North America                          $  3,431        $(10,757)       $(74,282)
   South America                            (1,275)           (633)          4,146
   Europe                                      186          (2,346)        (18,228)
   Other and eliminations                                                       81
                                          ---------       ---------       ---------
                                          $  2,342        $(13,736)       $(88,283)
                                          ========        ========        ========
Identifiable assets:
   North America                          $132,913        $145,002        $326,876
   South America                             8,849           9,487          27,526
   Europe                                   76,919          79,539         113,651
   Other and eliminations                                                      629
                                          ---------       ---------       ---------
                                          $218,681        $234,028        $468,682
                                          ========        ========        ========
</TABLE>

<TABLE>
<CAPTION>
United States export sales:
   (reported in North America net sales above)
<S>                                   <C>             <C>             <C>
   Asia                                    $15,697         $16,651         $15,319
   South and Central America                 4,951           6,593          14,515
   Other International                       5,211           4,296              72
                                          ---------       ---------       ---------
                                           $25,859         $27,540         $29,906
                                          ========        ========        ========
</TABLE>

The total assets and net assets of foreign businesses were approximately
$87,234 and $26,833, at December 31, 2002.

25.   QUARTERLY DATA (unaudited)

Quarterly financial information for 2002 and 2001 is as follows (in
thousands, except for per share amounts):

<TABLE>
<CAPTION>
                                     First        Second         Third         Fourth
2002                                Quarter       Quarter       Quarter        Quarter          Annual
----                                -------       -------       -------        -------          ------
<S>                             <C>           <C>           <C>           <C>            <C>

Net sales                           $43,387       $46,291       $48,673        $45,226        $183,577
Gross margin                          8,676        10,003         9,972          8,085          36,736
Operating (loss) income              (2,435)        6,053        (2,920)         1,644           2,342
Net (loss) income                    (7,883)        1,131        (8,683)        (3,895)        (19,330)
Net (loss) income per share
   - basic and diluted                 (.51)          .07          (.57)          (.25)          (1.26)
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                     First        Second         Third         Fourth
2001                                Quarter       Quarter       Quarter        Quarter          Annual
----                                -------       -------       -------        -------          ------
<S>                             <C>           <C>           <C>           <C>            <C>

Net sales                           $48,040       $46,503       $48,483        $46,289        $189,315
Gross margin                          8,758         8,538        10,843          4,918          33,057
Operating income (loss)              (2,663)       (2,536)          569         (9,106)        (13,736)
Net (loss)                           (1,040)       (7,821)       (4,696)       (11,969)        (25,526)
Net (loss) per share
   - basic and diluted                 (.07)         (.51)         (.31)          (.78)          (1.67)
</TABLE>

During the second quarter of 2002, the Company recognized a net
restructuring income of $6,132. The restructuring income is the result of a
reversal of $9,289 of excess reserve from the year 2000 for the reduction
of the Nucel(r) technology third party license fees, offset by a year 2002
restructuring charge of $3,157 (see Note 11).

During the 2001 first and second quarters, the Company recognized a net
gain on early extinguishment of debt of $4,930 and $3,207, respectively.
Additionally, during the second quarter of 2001, the Company recognized a
net gain on disposal of discontinued operations of $3,189.

During the 2001 fourth quarter the Company recognized a $3,612 charge to
cost of sales related to the write-down of Inventories to its lower of cost
or market value. Additionally, the Company recognized a restructuring
charge of $4,766 for the write-down of the Chicago facility.

<PAGE>
          VISKASE COMPANIES, INC. AND SUBSIDIARIES            SCHEDULE II
             VALUATION AND QUALIFYING ACCOUNTS

                    (in thousands)

<TABLE>
<CAPTION>
                                      Balance at     Provision                                               Balance
                                       Beginning     Charged to                                               at End
     Description                       of Period       Expense      Write-offs    Recoveries    Other(1)     of Period
     -----------                      ----------     ----------     ----------    ----------    --------    ----------
<S>                                <C>           <C>           <C>             <C>         <C>            <C>
2002 for the year ended
     December 31
     Allowance for
     doubtful accounts                   $1,470        $  477        $  (711)        $22        $    76         $1,334

2001 for the year ended
     December 31
     Allowance for
     doubtful accounts                   $1,675        $  425        $  (554)        $54        $  (130)        $1,470

2000 for the year ended
     December 31
     Allowance for
     doubtful accounts                   $1,642        $  433        $  (269)        $46        $  (177)        $1,675

2002 for the year ended
     December 31
     Reserve for obsolete and
     slow moving inventories             $2,816        $1,670        $(1,877)                   $   116         $2,725

2001 for the year ended
     December 31
     Reserve for obsolete and
     slow moving inventories             $5,029        $1,150        $(2,029)                   $(1,334)        $2,816

2000 for the year ended
     December 31
     Reserve for obsolete and
     slow moving inventories             $4,110        $4,032        $(5,076)                   $ 1,963         $5,029
</TABLE>


(1)   Foreign currency translation and the 2000 disposition of Films
      Business.

<PAGE>
                             EXHIBIT 21.1

                     SUBSIDIARIES OF THE REGISTRANT

The Company has the following subsidiaries, each of which is wholly owned
by the Company or by a wholly owned subsidiary of the Company. Indented
names are subsidiaries of the company under which they are indented.

   Envirodyne Subsidiary, Inc. (Delaware)
   Envirosonics, Inc. (California)
   Viskase Corporation (Pennsylvania)
      Viskase Holding Corporation (Delaware)
         Viskase Australia Limited (Delaware)
         Viskase Brasil Embalagens Ltda. (Brazil)
         Viskase Canada Inc. (Ontario)
         Viskase Europe Limited (United Kingdom)
            Viskase S.A.S. (France)
               Viskase GMBH (Germany)
               Viskase Holdings Limited (United Kingdom)
                  Filmco International Limited (United Kingdom)
                  Viskase Limited (United Kingdom)
                     Viskase (U.K.) Limited (United Kingdom)
               Viskase S.p.A. (Italy)
               Viskase Polska SP.ZO.O (Poland)
      Viskase Sales Corporation (Delaware)
         Viskase Puerto Rico Corporation (Delaware)
   Viskase Films, Inc. (Delaware)
   WSC Corp. (Delaware)

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                             EXHIBIT 23.1

                 CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (File Nos. 333-10689 and 333-12829) of Viskase
Companies, Inc. and Subsidiaries of our report dated March 14, 2003,
relating to the financial statements and financial statement schedule which
appears in this Form 10-K.



Chicago, Illinois
March 31, 2003

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